Air India Disinvestment

Air India has again been put up for sale by government. Government had tried earlier but noone was prepared to take on the 52000 cr liabilities. This time, the govt has shifted 30000 cr to a special purpose vehicle. Reports suggest that Etihad,Tata Group, Hindujas, etc., have shown interest. Several unions are against selling PSU units.

Government has increased welfare state model in India which is requiring lot of amount spending. Most of these PSU units are being absorbed by select Private companies who have close ties with government. This has led to doubts being raised about these sales. Government pushing the funds thus raised through disinvestment into welfare state models does not affect core revenue distribution from taxes, etc.,

India has 8 lakh crores NPAs out of which 2 Lakh crores have been recovered so far. Few firms hold most NPAs and they all have political affiliation due to which recovery is very slow. Instead of recovering money from politicians, PSUs are being sold to private companies.