Officials of the ministry will appear before the PAC for the first time on Wednesday after the panel decided to take up the CAG report on Civil Aviation which was tabled in Parliament in September last.
The CAG had described the merger of Air India and Indian Airlines as "ill-timed" and said the exercise was undertaken "strangely from the top (rather than by the perceived needs of both these airlines), with inadequate validation of the financial benefits".
Terming the move for acquiring a "large number" of planes as "risky", the CAG said the aircraft acquisition had "contributed predominantly" to the airline's massive debt liability of Rs 38,423 crore as on March 31 last year.
The government auditor had recommended, among other measures, "a total hands-off approach (by the government) with regard to the management of the airline".
The CAG also took the Civil Aviation Ministry to task for liberalising the bilateral air traffic entitlements with other countries in a manner which "did not provide a level playing field to AI (and to a lesser extent other Indian private airlines)".
The report dealt with several aspects of the ailing national carrier's losses, fleet acquisition, merger, huge debt burden, delay in joining the global airline grouping Star Alliance and its financial and operational performance.