How much taxpayers’ money will be wasted on Air India?
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By Ruma Mazumdar | 06:34 PM Tuesday, 14 February 2017
  • Union Minister for Civil Aviation confirmed that the government wants Air India to survive irrespective of who runs it.
  • Economic Survey 2017 recommended that Air India should be privatised.  

The central government wants to keep the Air India alive, but surely, this is causing a hole in taxpayers' pockets. The airline already has a debt of ₹50000 crores. 

 

Ashok Gajapathi Raju, the Union Minister for Civil Aviation, said that the central government wants Air India to survive and that the government does not mind who runs the airline as long as it serves the Indian people. The minister made this statement during a conversation with CNN’s Richard Quest at CNN Asia Business Forum as a response to the question regarding the privatisation of Air India. 

 

"If it is left like what it is, it is bound to die.... we want Air India to survive, we don't mind where it is, who runs it. As long as it serves the Indian people and Indian skies, we are happy," Raju said.

 

Calling it a ‘nice’ airline the minister said that in the last two years Air India has not added to its losses. "....I like that Airline, I like it to survive, I would love it to survive, but I can’t commit the tax payers’ money for eternity," he added. 

 

He also said that regional connectivity is among the priorities of the central government for civil aviation in India while stating that there are about 31-32 airports that are not serviced by the airlines. The priority for the government is to connect the unversed and the underserved. 

 

Air India has been a burden for the taxpayers which also ranked at the third worst airline in the world. In 2017-18, this airline has received a capital infusion of ₹1800 crores and in last two years, it got ₹5765 crores. Air India is a loss making PSU that suffered from ₹5859 crores loss in the financial year 2015 and ₹3587 crores loss in the financial year 2016. At present, the short-term working capital debt of Air India is ₹28000 crores and its total debt is ₹50000 crores.

 

Also READ: Sorry Air India, six ‘reserved’ seats for ladies won’t keep you flying

 

In short, an enormous amount of taxpayers’ money is going into making this airline work and despite that is not showing any financial as well as operational improvement. The Economic Survey 2017 recommended that Air India should be privatised to lessen the burden on taxpayers while sticking to government’s commitment to keep this airline alive. 

 

However, in view of the overwhelming figure of debt, it is hard to imagine that private players would be interested in making an investment in Air India and infusing more public money into it is a sheer waste of money that can be used in other sectors.   

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