Finance Minister P Chidambaram on Friday said that he was not happy with turnaround plan of Air India (AI) but is injecting Rs 2,000 crores to keep air fares in check. ‘As far as AI is concerned there is a turnaround plan. I am not happy with the way the plan has been implemented in the past. There has been several setbacks. But what do we do with AI? If I do not provide this Rs 2,000 crore there will be greater difficulty,’ he said in the Lok Sabha while winding up a discussion on the supplementary demands for grants.
Of the additional expenditure Rs 32,120 crore under the first batch of supplementary, Rs 2,000 crore has been earmarked for equity infusion in Air India as part of the turnaround plan and restructuring package. The national carrier’s losses have been mounting from Rs 5,548.26 crore in 2008-09, Rs 5,552.44 crore in 2009-10, Rs 6,865.17 crore in 2010-11 to Rs 7,853 crore in 2011-12.
‘If AI is not kept afloat, what will happen is airfares will go up, other airline companies will simply push up their air fares because so many seats will not be available. Which is why we are providing Rs 2,000 crore to AI,’ Chidambaram said.
Meanwhile, hinting at some tough measures in the coming days, Finance Minister P Chidambaram said some ‘bitter medicine’ is necessary to restore the health of the economy and get back to high growth path. ‘Some bitter medicine has to be taken this year. We have to take some bitter medicine. There is no other way...this bitter medicine is good medicine.