The Indian government has budgeted only a small amount to support Air India’s turnaround plan for the year to April 2020. Documents reveal that it has received Rs 39.8 billion ($596 million) this financial year.
This marks a sharp increase from the previously allocated budget of Rs 6.5 billion for the debt-ladden airline for the year to 31 March 2019, and well over double the Rs18 billion provided by Center to the Air India in the 2017/18 fiscal year.
By comparison, only Rs100,000 has been allocated to the turnaround plan for fiscal 2019/20.
In 2018 the government attempted to sell a 76% stake in the financially-hamstrung carrier, but there were no takers.
In the aftermath of that failed attempt, the airline issued tenders seeking a total of Rs15 billion in urgent working capital loans, and sought additional capital infusions from the government.
While the carrier has only been allocated a small amount, budget documents show that Rs26 billion has been allocated to Air India Asset Holding in 2019/20, which will take over some of the carrier’s debt. The figure is double the amount received this year.
Air India has over Rs500 billion in debt, and the airline has started liquidating its immovable assets across India in an attempt to reduce its liabilities.