Air India, BPCL To Be Sold By March 2020: FM Nirmala Sitharaman

Published : 18 Nov 2019 8:12 AM GMT
Air India, BPCL To Be Sold By March 2020: FM Nirmala SitharamanImage Credit: Livemint, Cloudfront

Air India and Bharat Petroleum Corporation, two debt-ridden state-owned companies, are expected to be sold by the government by March next year, Finance Minister Nirmala Sitharaman said in an interview with The Times of India.

The privatisation of the national carrier and oil refiner is expected to help the government meet its divestment target of Rs 1 lakh crore in the current fiscal year.

Sitharaman also said that the government is on the right track towards resolving the economic slowdown and added that several sectors are now coming out of distress.

The Finance Minister’s statement comes at a time when the national carrier is under a debt of Rs 58,000 crore. Air India posted an operating loss of around Rs. 4,600 crore in the last financial year due to higher oil prices and forex losses. Around 120 Airbus A-320 pilots resigned after their long-pending demand pertaining to the salary hike remain unmet.

Earlier this month, Air India chairman Ashwani Lohani, in an open letter to Air India employees said that the divestment may enable the airline’s sustainability.

For Air India, there is a “lot of interest” among investors, Sitharaman said. This is the government’s second attempt to sell its stake in Air India. In 2018, the government put up 76 percent of Air India for sale, which attracted a weak demand from investors.

In the case of Bharat Petroleum Corporation Limited (BPCL), a group of secretaries had agreed for the sale of the government’s entire 53.29 per cent stake in the company in October. Bharat Petroleum has a market capitalisation of about Rs.1.02 lakh crore. With the sale 53 per cent of its stakes, the government is hoping to garner around Rs. 65,000 crores.

Speaking on taxation, Sitharaman said that she expects Goods and Services Tax collections to bounce back citing improvement in some sectors and recent steps taken to provide a boost to the ailing economy.

The finance minister also said that consumer sentiment was improving, adding that Rs 1.8 lakh crore in loans have been sought from banks at the outreach programme during the festival season. “If consumer confidence is not on way to being restored, why would you think that such an amount would have gone out as loans during the two outreach programmes started by banks? And, it is all over the country,” Sitharaman said.

While several rating agencies have lowered India’s GDP growth forecast for the quarter ended September below 5 per cent, Sitharaman claimed that the economy will bounce back in due course.

Also Read: Air India Pilots Resign En-Mass, Questioning Promotion & Salary Hike

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