GoM clears Rs150-crore for Air India to pay salaries
18 January 2012
Though the aviation sector has found itself in a turmoil for an extended time now, the problems that have plagued Air India started long before the first signs of general distress in the sector appeared.
The government has decided to chip in with cash to help the distressed national carrier, Air India, to pay at least part of the salaries of its employees.
Air India, which is now mostly flying on government handouts, finds it impossible to even pay the salaries of its staff, a problem that has assumed massive proportions.
A meeting of the group of ministers yesterday decided to pay the ailing carrier Rs150 crore so that it would be able to pay a part of salaries due to its 32,000 employees.
Aviation minister Ajit Singh said after a meeting with finance minister Pranab Mukherjee that Air India would get Rs150 crore as the government had decided to release sufficient funds to pay at least some part of the wages and productivity-linked incentives.
Meanwhile, the GoM would look at a fresh set of options, including infusion of additional funds to bail out Air India, as lenders had refused to climb down from their position on converting 40 per cent of the Rs21,000-crore loans into equity.
Though the issue is being deliberated by the State Bank of India, which heads the lenders' consortium and finance ministry officials, banks are refusing to pick up the handout tab of Rs9,000 crore over the next few years.