After a meeting on Thursday, the Cabinet Committee on Economic Affairs (CCEA) declared that the plan proposed by the debt-laden carrier (Air India) has been approved by the government.
Air India's plan includes infusion of additional equity to shore up the precarious financial position of the cash-strapped carrier.
The government decided to infuse Rs 4,000 crore as additional equity which would raise the airlines' equity base to Rs 7,345 crore.
However, the cabinet left many people depressed as it did not take any decision on allowing more that 49 per cent FDI in aviation. Vijay Mallya must be one of those people who might have dreamt of making their respective airline businesses debt-free.
The finance ministry led by Mr Pranab Mukherjee and aviation ministry led by Mr Ajit Singh have already agreed to allow foreign carriers to invest up to 49 per cent in local carriers. However, the government is yet to announce its decision about domestic carriers.