05 March, 2020
3 Min Read
Syllabus subtopic: Effects of Liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth.
Prelims and Mains focus: about the move to privatize Air India and its significance; about Air India
News: The Union cabinet approved a proposal to let non-resident Indians (NRIs) own up to a 100% stake in Air India Ltd as the government attempts to make a success of its second attempt to completely privatize the debt-laden airline.
The government, which aims to divest its entire stake in Air India, in February began the stake sale process by inviting offers from potential investors after a costly turnaround plan and an earlier effort to sell a controlling stake in the flag carrier failed. To sweeten the deal, the Centre has also reduced Air India’s debt from about Rs.56,334 crore to about Rs.23,287 crore.
About the move
The cabinet, headed by Prime Minister, has approved an amendment to the foreign direct investment (FDI) policy to permit FDI in Air India by NRIs up to 100% under the automatic route.
Significance of the move
The cabinet decision will give the government more flexibility to receive bids for Air India.
Investment rules for NRIs
About Air India
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