Seven days after the Narendra Modi government faced a 'no show' from buyers on the strategic disinvestment of Air India, the government now wants to repair some of its damaged reputation.
On Wednesday, a cabinet meeting headed by Prime Minister Narendra Modi decided to give the go-ahead for fresh guidelines tabled on time-bound closure and for disposal of movable and immovable assets of 'sick/loss-making Central PSUs'.
This is a category into which the national carrier Air India could easily fit in. The airline had suffered losses over the last three years to the tune of Rs 27,354 crore and has received Rs 47,000 crore in government aid over the last four years.
"The revised guidelines would reduce delays in implementation of closure plans of sick/loss-making CPSEs," said a cabinet note after the meeting on Wednesday.
"These guidelines provide a broad framework for expeditious completion of various processes and procedures for closure of Central public sector enterprises (CPSEs) by laying down important milestones in the closure process along with timelines, outlining the responsibilities of the concerned ministries/departments/CPSE, etc. in the process," said the government note.
The detailed guidelines, approved on Wednesday, charted out advance preparatory action to be taken by the administrative ministry of the CPSEs. These include preparation of the closure proposal, settlement of statutory and other liabilities of the CPSE under closure and modalities for disposal of their assets in a time-bound manner.
Land utilisation of sick CPSEs for providing affordable housing is mooted under this policy. "The guidelines give first priority for utilisation of land of CPSEs under closure for affordable housing as per the relevant guidelines of Ministry of Housing and Urban Affairs," the cabinet note said.
As for employees of these sick CPSEs, the government laid down a uniform VRS policy, providing these employees VRS at the notional pay scale of 2007, irrespective of their current pay scale, it said.
The new guidelines would apply only to sick or loss-making CPSEs, whose approval for in-principle closure has been given by the parent department or ministry or by the Cabinet Committee of Economic Affairs.
In the current fiscal, if Air India is not sold by the government, the airline is likely to be notching up losses between Rs 10,035 crore and Rs 13,380 crore, a report by CAPA, a global civil aviation research firm, assessed.
However, aviation industry experts suggested that if Air India remains unsold for much longer, the government should be prepared to sell Air India assets piece by piece.
As of Wednesday, the civil aviation ministry is yet to frame any concrete plans on what to do next for Air India. It does not want to dilute the sale terms or down the shutters.