(FE)
With cash crunch likely to continue in Air India (AI) due to rising fuel costs, the Centre may infuse additional Rs 2,200 crore in the debt-ridden national carrier later in the current financial year to meet an estimated shortfall in working capital requirement to service loans and pay salary in time.
The additional budget support means the government’s Rs 30,231-crore equity infusion under a 10-year turnaround and financial restructuring plan will come to an end two years ahead of its schedule, ie, FY21. AI has received equity infusion of Rs 28,175 crore till date. So far this year, the government has provided Rs 1,630 crore, including supplementary provision of Rs 980 crore in August, to Air India as compared to the budget estimate of only Rs 650 crore to tide over cash shortage.
“Additional Rs 2,200 crore may be provided to AI subject to availability of funds in the second half of this year,” a government official said. If fund availability becomes an issue, the government might provide guarantee to Air India to raise that much money from banks, the official added.
