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Ashwini Phadnis

New Delhi, Sept. 26 Air India’s proposal seeking Government funds of Rs 1,500-2,000 crore will be discussed when the first supplementary demand for grants is taken up by Parliament during the winter session.

This means that the proposal for Air India to receive government funding will have to be completed within the next three weeks if the State-owned carrier is to receive the funds during the winter session.

Sources indicated that Air India’s proposal for seeking Rs 1,500-2,000 crore will be taken up during the Parliament session.

“How much the airline get remains to be seen and will depend on what Parliament finally approves,” sources said.

The Finance Ministry, which will lay before the House the first batch of Supplementary Demand for Grants for 2009-10, has set October 14 as the cut-off date by when all proposals for funds to be considered by Parliament as part of the first supplementary demands for grants are to be sent.

Being a state-owned enterprise no large fund infusion into the carrier is possible till it is approved by Parliament. The Committee of Secretaries, headed by the Cabinet Secretary, has already approved a proposal for providing additional equity of Rs 5,000 crore over three years to Air India.

The proposal will have to be cleared by the Union Cabinet before the funds can be released.

The airline has already initiated steps to reduce its costs.

Earlier this week, the board proposed cutting the productivity linked incentive scheme for 7,000 of the 31,500 employees.

The cut in PLI will be on a graded scale ranging from 25-50 per cent depending on the amount being paid to the employees.

The airline incurs an expenditure of Rs 350 crore annually on wages and PLI and led to a situation where salaries and wages constitute 35 per cent of total operating costs.

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