Policy

AI privatisation: Centre should finish what it started, says CEA

Our Bureau | | Updated on: Jan 29, 2018
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Commenting on the Economic Survey, Chief Economic Advisor (CEC) Arvind Subramanian on Monday added his voice to those in favour of privatising Air India (AI).

“My own view is that the government does not have to do anything new or radical. They should finish what they started out with. They should stabilise the GST. Finish privatising Air India,” he said while addressing the media soon after the Survey was tabled in Parliament.

His comments come days after the Department of Industrial Policy and Promotion (DIPP) notified the easing of Foreign Direct investment (FDI) rules in several sectors including allowing foreign airlines to acquire a 49 per cent stake in AI. The DIPP move followed the Union Cabinet decision on January 10 to allow foreign airlines to acquire a 49 per cent stake in state-owned airlines.

Last week, RN Choubey, Secretary Civil Aviation, said the Centre is keen to garner expressions of interest (EoI) to invite bids for AI at the earliest.

“Discussions are going on with the transaction advisers (helping the Centre take forward the divestment process). We have to take it to the Alternate Mechanism of the Ministers. Once this is approved the EoIs will be uploaded. It will happen shortly,” Choubey had said.

Meanwhile, pointing out that India is the third largest, and fastest growing, aviation market in the world in terms of number of domestic tickets sold, the Economic Survey states that in 2016-17, annual growth in domestic passenger departures was 23.5 per cent, compared to 3.3 per cent in the US and 10.7 per cent in China.

It further says that during April-September 2017-18, domestic airlines carried 5.75 crore passengers, registering a growth of 16 per cent over the corresponding previous year period.

Scheduled Indian and foreign carriers carried 2.92 crore passengers to and from India, registering a growth rate of 9 per cent in April - September over the corresponding previous year period. During this period, the domestic air cargo handled was 6.1 lakh tonnes, showing a growth of 10.27 per cent over the previous year period, and international air cargo handled was 10.7 tonnes, showing a growth of 19.02 per cent.

Turning its attention to the development of infrastructure, the Survey says the Centre has granted in-principle approval to set up 18 greenfield airports including in Mopa (Goa), Navi Mumbai, Shirdi and Sindhudurg (Maharashtra), Bijapur, Kalaburagi, Hasan and Shivamogga (Karnataka), Kannur (Kerala), Dagadarthi Mendal, Bhoogapuram and Oravakallu in Andhra Pradesh.

Published on January 30, 2018

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