The government has cleared sale of Air India and several other loss-making public sector companies but that they are yet to be sold is the "result of timing and process", Modi said.
His remarks come against the backdrop of the government's proposal...
for strategic disinvestment of debt-laden Air India failing to attract any bidders.
"As for Air India, the government has done what it had to with utmost sincerity. You have to differentiate between the lack of response to one sale offer and a policy decision," Modi said in an interview to 'Swarajya' magazine.
This is also the first time that the prime minister has commented on Air India after the disinvestment proposal failed to take off in May.
Responding to queries that the government does not seem too keen on privatisation, Modi also said that "at the Cabinet level, we have cleared the sale of not only Air India but several other (loss-making) public sector units".
"This itself is historical in many ways; that they are yet to be sold is the result of timing and process. We don't want to make a sale where we will be accused of selling something for X amount when we could have got more. But the policy decisions for strategic sales have already been taken".
Under the proposed plan, the government was to sell 76 per cent stake in Air India along with complete divestment of low-cost arm Air India Express and a 50 per cent stake in Air India SATS Airport Services Pvt Ltd -- an equal joint venture with Singapore's SATS.
On June 20, the civil aviation ministry had said the government was committed to strategic disinvestment of Air India and that a plan was being prepared to run the airline efficiently.
The loss-making airline's market share stood at 12.8 per cent in May, as per official data.
The government on March 28 approved strategic disinvestment of the state-owned national carrier, by selling 76 percent of its equity stake in the national carrier.
However, the government failed to draw even a single proposal for stake in the state-run carrier by May 31, deadline for stake sale in the national carrier. Even though no bids were received till May 30, the government was hopeful of a last-minute dash. But a no show by investors has dealt a severe blow to the privatisation plans for the national carrier.
While the government hadn't set any minimum price, the sale was expected to fetch between Rs. 80 billion and Rs. 100 billion.
The management control would have been with the buyer which could have gained access to more than 2,500 international slots and over 3,700 domestic slots.
At the end of March 2017, the carrier had a debt burden of around Rs 48,877 crore. Out of the total amount, Rs 17,360 crore was related to aircraft and Rs 31,517 crore pertained to working capital loans.
The government was earlier considering giving the VRS to non-technical staff but has dropped the idea. It is betting on the fact that a significant number of Air India employees are close to the retirement age, which would mean that a large share of employees will retire soon. The average age of staff at Air India is 55 years, against the retirement age of 58.
In total, Air India and its five subsidiaries have around 22,000 employees, of whom Air India has around 12,000. It includes 897 pilots and 2,750 cabin crew who are termed technical employees. The rest comprises non-technical staff working in ground handling and management.
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