Finance Minister Nirmala Sitharaman in her Budget speech on Monday announced that the disinvestment and subsequent privatisation of the debt-laden national carrier Air India should be completed this fiscal year. Air India is currently in the disinvestment process after failing to garner profit since 2007 with several bidder companies having submitted Expressions of Interest (EoI) for the company including the Tata group. In addition to Air India, the helicopter service Pawan Hans shall also be privatised this year, added the Minister.
In the coming days, the Ministry of Finance's Department of Investment and Public Asset Management shall release the list of qualified bidders from those who submitted EoI who can then place bids for the airline.
As part of financial restructuring, Air India Asset Holding Ltd, a special purpose vehicle (SPV) will be set up for which Rs 2,268 crores has been allocated.
In the Union Budget for the coming fiscal year, the Ministry of Civil aviation has been allocated Rs 3,224 crores which is 22% lower than the Rs 4,131 crores allocated in 20-21.
Following the reduced investment trend, the government allocated Rs 600 crores, 14.28 per cent less than the current fiscal, to the regional connectivity scheme Udaan for the upcoming fiscal year. Under the Udaan scheme, financial incentives are extended to airlines to start operations from less-busy airports while simultaneously keeping fares affordable.
Sitharaman also added that the government would monetise the assets of AAI airports in tier-2 and tier-3 cities to raise money for developing new infrastructure.
The Budget has tried to woo the poll-bound states with voluminous projects. However, other states which pinned hopes on the budget went into a huddle on Monday as there was nothing significant for them. Telangana, Andhra Pradesh, Bihar and others did not get anything to cherish.
Many opposition party leaders came out against the budget and said that the financial statement lacked the inclusive approach.
Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy and senior officials were seen disappointed, with no major allocation for the state.
"There were no major budget allocations to the state, though we looked forward with hope as we lost a major chunk of assets and infrastructure in the state's bifurcation," said an official.
Despite multiple visits to Delhi in the preceding months by Reddy, Finance Minister Buggana Rajendranath and others to plead with the Centre to be generous with the bifurcated state, the budget came as a huge disappointment.
The budget also disappointed those who expected a change in the Income Tax slab.
"From this Budget, we were expecting that income tax slab would be increased from the present limit of Rs 5 lakh so that people hit by the pandemic get some relief," Kamaljit Rai, Vice President of New Delhi's Palika Bazaar traders' body said.
Bihar's opposition Rashtriya Janata Dal (RJD) described the Union Budget 2021-22 presented by Finance Minister Nirmala Sitharaman as "visionless" and said it does not meet the expectations of the people of the country.
RJD Rajya Sabha member Manoj Jha said, "I will say that this is not the Budget for the common people. This Budget has been made for a few people and a blueprint is being prepared to hand over all the resources to some select corporates."
He also urged the government to reconsider the Budget.
(With inputs from PTI)