New Delhi, Jul 31: The Finance Ministry on Friday sought Parliament's nod for making an additional equity infusion into Air India worth Rs 800 crore, less than half the amount sought by the Civil Aviation Ministry for the national carrier.
The amount sought for making investment in Air India is part of the first supplementary demands for grant presented in Parliament by Finance Minister Arun Jaitley.
Air India, which is grappling with tremendous financial stress, was allocated Rs 2,500 crore in the Union Budget 2015-16.
However, this amount was well short of nearly Rs 4,300 crore sought by the Ministry for the national carrier. To make up the shortfall, the Ministry had sought Rs 1,800 crore through supplementary demand for grants.
As per the supplementary demand for grants, the Civil Aviation Ministry is to be given additional Rs 820.25 crore, including Rs 800 crore equity infusion in Air India.
Besides, Rs 12.83 crore would be for providing remuneration to Flight Operations Inspectors deployed at the Directorate General of Civil Aviation (DGCA), Rs 6.75 crore towards payment of service tax with respect to Flight Operations Inspectors and Rs 0.46 crore for funds related to minor works in the premises of DGCA.
Loss-making Air India, whose debt burden is about Rs 40,000 crore, is surviving on a bailout package approved in 2012. In the last financial year, Air India reduced its losses to Rs 5,547.47 crore.
Air India has achieved the target set out in the Turn Around Plan (TAP), and has made substantial progress in both operational as well as financial areas, Minister of State for Civil Aviation Minister Mahesh Sharma informed the Lok Sabha earlier this week.
Since the implementation of TAP/ Financial Restructuring Plan (FRP), the operating loss has reduced from Rs 5,138.69 crore in the fiscal 2011-12 to Rs 2,171.40 crore in the year ended March 31, 2015. Net loss has come down to Rs 5,547.47 crore in 2014-15 from 7,559.74 crore in 2011-12, Sharma had said.
The erstwhile UPA dispensation had in April 2012 approved Air India's turnaround plan and a financial restructuring plan, with a committed public funding of Rs 30,231 crore, staggered over a period of nine years, with some specific riders.