HomeBusinessAir India Sale A Key Milestone In India's Privatisation Efforts: IMF Official

Air India Sale A Key Milestone In India’s Privatisation Efforts: IMF Official

Air India Sale A Key Milestone In India's Privatisation Efforts: IMF Official

IMF has mentioned that Air India’s sale is a key improvement in India’s privatisation plan

The International Monetary Fund (IMF) on Monday mentioned the sale of nationwide service Air India will represent an “important milestone” in India’s privatisation efforts.

Tata group has emerged because the successful bidder for the loss-making Air India, and on October 11, a letter of intent (LoI) was issued to the group.

“We welcome the recent agreement on the sale of Air India, which constitutes an important milestone,” Alfred Schipke, Director of IMF-STI Regional Training Institute and a former IMF India Mission Chief, advised a information company.

Earlier this month, the federal government accepted a proposal by Talace Private Limited, a unit of Tata group, to pay Rs 2,700 crore money and takeover Rs 15,300 crore of Air India’s debt.

After Tatas settle for the Letter of Intent (LoI), the share buy settlement (SPA) for the sale will probably be signed. Along with Air India, Tatas will purchase low-cost service Air India Express and Air India’s 50 per cent stake in equal three way partnership AISATS.

“In general, to maximise the benefits from privatisation, the international experience highlights the importance of medium-term privatisation plans, solid regulatory frameworks, competitive markets and the buy-in of key stakeholders,” Mr Schipke mentioned because the IMF launched its annual report on India.

As with all structural reforms in the course of the transition, he mentioned you will need to strengthen social security nets to maximise the advantages and minimise any hostile implications.

The annual report lists greater than 130 key coverage actions which were undertaken by the Indian authorities within the final one 12 months as a part of efforts to liberalise and reform the nation’s financial system.

“On monetary policy measures, the RBI has provided significant, broad-based, and appropriate monetary easing through interest rate cuts and an accommodative stance,” Mr Schipke mentioned.

These have been aided by time and state-contingent ahead steerage on coverage charges and, extra not too long ago, on asset purchases, to higher anchor market expectations amid unprecedented uncertainties. Various liquidity measures resulted in a cumulative injection of over six per cent of GDP throughout February 2020–March 2021 and helped keep away from a broad-based liquidity crunch for each monetary and non-financial corporates, he added.

“Among financial sector measures, the creation of the National Asset Reconstruction Company Ltd is a welcome development that shows the authorities” efforts to secure financial stability and to address the problem of distressed bank assets,” the IMF official mentioned.

Furthermore, he mentioned the current recapitalisation of public sector banks (PSBs) and the privatisation of two public sector banks and one state-owned insurance coverage firm are welcome developments and “we await further details”.



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