NEW DELHI - The Indian government on Tuesday sought parliament approval to inject 9.8 billion rupees ($142.87 million) in ailing national carrier Air India during the current fiscal year, after efforts to find a buyer for its 76 percent stake in the carrier failed.
The government has "sought funds for infusion of equity in Air India under (its) turn around plan," a statement tabled in the lower house of parliament said.
To fund the capital infusion in Air India and other sectors, the government has sought parliament's approval for an additional net spending of 59.51 billion rupees, on top of the budgeted 24.42 trillion rupees for 2018/19.
India last month shelved a plan to sell a majority stake in the beleaguered airline due to lack of interest from bidders, in the latest setback in its ambitious efforts to rescue the carrier that has been kept afloat for years using taxpayer funds.
The sale was also key to Prime Minister Narendra Modi’s plans to help keep the fiscal deficit at 3.3 percent of GDP, a goal already under pressure from giveaways to farmers and other welfare benefits ahead of the 2019 national elections.
An Air India source told Reuters on Monday that it had sought 21.21 billion rupees ($309 million) of additional equity from the government for 2018/19 to make pending payments to its vendors.
Junior Civil Aviation Minister Jayant Sinha had said last month the government will continue to support the loss-making airline’s financial requirements while it works on alternatives. The minister didn't give a specific timeline for a new plan.
Air India, which employs some 27,000 staff, said this month it was seeking a short-term loan of 10 billion rupees ($148 million) so it can continue day-to-day operations.
The carrier had debt worth 487.81 million rupees ($7.16 billion) as of March 31, 2017.