Air India and Bharat Petroleum Corporation, two debt-ridden state-run companies, are expected to be sold by the government by March 2020, Finance Minister Nirmala Sitharaman said in an interview with The Times of India.
The Finance Minister’s statement comes at a time the ailing national carrier is facing financial stress, sitting on a debt pile of around Rs. 58,000 crores.
Ms Sitharaman said, “We are moving on both with the expectation that we can complete them this year. The ground realities will play out.” While referring to the strategic sale of the two state-run companies, a crucial part of the government’s plan to raise over Rs 1 lakh crore in the current fiscal year.
Earlier this month, Air India chairman Ashwani Lohani, in an open letter to Air India employees, had said that the divestment may enable the airline’s sustainability.
For Air India, there is a “lot of interest” among investors. A year ago, the loss-making airline’s sale had to be aborted due to a dull response from investors. The government is banking on receipts from disinvestment- comprising strategic sale and public offers to uphold revenues in a year when tax collections are under pressure, Ms Sitharaman said.
‘People from many industries are coming to us and saying they are out of distress’ – Times of India https://t.co/NsAyF0LBND
— Nirmala Sitharaman (@nsitharaman) November 17, 2019
The minister also said, “The government took measures to reverse the economic slowdown at the right time and several sectors are coming out of distress”. She further added that the industry captains had contributed to improving their balance sheets and many of them were also considering fresh investments.
The finance minister said she was expecting GST revenues to recover after-sales recovery in some segments as well as recent plug-in leakage initiatives by the government.
Commenting on the recent decision of the Supreme Court on Essar Steel, Sitharaman said the ruling strengthened IBC law’s constitutionality and legal power and would have a significant impact on banks ‘ balance sheets in the next quarter.