The move has encountered criticism from a parliamentarian from the governing federal Bharatiya Janata Party (BJP). Dr Subramanian Swamy has threatened to take the government of Prime Minister Narendra Modi to court over the move.
Dr Swamy claimed, “Air India (was) on Recovery mode”.
A large number of the twitterati has come out in support of Swamy’s view that auctioning off “family silver” was unacceptable, especially when the airline was making great efforts to come out of the red.
Another group of netizens criticised Dr. Swamy for his views, with some saying that the government should not be involved in business ventures at all.
The government will identify pre-qualified bidders by 31 March and thereafter the disinvestment process is set to enter stage two, where price bids will be considered and followed up by a decision for whom to sell Air India to.
With this auction, the government aims to mitigate Air India’s $8.45 billion debt. The airline owes $3 billion to airports and other vendors. As per the government’s decision, it plans to write off a $2.20 billion working capital loan. With this, the prospective bidder will have a debt liability of only about $3.25 billion.
This is the second attempt to privatise the national carrier, which is facing daily losses worth $3.6 million. The Indian government failed in its bid to sell it late last year, as the word going around in business circles was that Air India is burdened with debt, operational liabilities, and incurring losses worth billions.