The government of India is set to privatize the national air carrier Air India in the fiscal year 2021-2022.
Speaking to Indian media outlet ThePrint on February 3, 2021, Nirmala Sitharaman, the Finance Minister of India, said that the government intends to privatize the majority of state-owned companies, including the national air carrier Air India “over the next few years”.
The Minister argued that the Indian government should maintain a minimum presence in only four strategic sectors of the country which are important for national security. The state-controlled sectors should include atomic energy, space, and defense as well as communications, energy, and financial services, according to Sitharaman. Meanwhile, other sectors should be in private owners’ hands.
Following governmental plans, Air India is in line among the batch of Indian companies that are already set to be privatized in the fiscal year 2021-2022. While the strategic disinvestment process of the national air carrier of India, which current debt reaches over €4.38 billion (Rs 38,366 crore), is in progress, the stake sale in Air India is set to be concluded in the first or second quarter of 2021.
“It is a big policy shift where we are saying that the government shouldn’t be in business and these are the four sectors where we will have a bare minimum presence. The rest of it will be privatized, or maybe consolidated or closed. But privatization is the first option. And in non-strategic sectors, we will exit,” Sitharaman said, outlining that many state-owned companies would be privatized in the next few years.
Earlier in December 2020, Hardeep Singh Puri, the Minister of Civil Aviation, stated that the sale of the national carrier might be finalized by March 2021.
The Indian government initiated the sale of 100% of Air India’s equity share capital in January 2020, setting an initial deadline for bidding in March 2020. However, the deadline was extended a few times and the bidding process was closed only on December 29, 2020.
The list of bidders for Air India’s stake had initially to be formed by January 5, 2021. However, in the wake of the COVID-19 pandemic, the government extended the date by January 30, 2021.