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Air India Sale A Secret Turning point In India's Privatisation Efforts: IMF Official

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IMF has stated that Air India's sale is a crucial development in India's privatisation planThe International Monetary Fund (IMF) on Monday stated the sale of national carrier Air India will make up an important turning point in India's privatisation efforts.Tata group has become the winning bidder for the loss-making Air India, and on October 11, a letter of intent (LoI) was issued to the group.

We invite the current contract on the sale of Air India, which constitutes a crucial turning point, Alfred Schipke, Director of IMF-STI Regional Training Institute and a former IMF India Objective Chief, informed a news agency.Earlier this month, the government accepted a deal by Talace Private Limited, an unit of Tata group, to pay Rs 2,700 crore money and takeover Rs 15,300 crore of Air India's debt.After Tatas accept the Letter of Intent (LoI), the share purchase arrangement (HEALTH CLUB) for the sale will be signed.

Along with Air India, Tatas will get low-cost provider Air India Express and Air India's 50 per cent stake in equivalent joint venture AISATS.

In general, to increase the take advantage of privatisation, the international experience highlights the significance of medium-term privatisation strategies, strong regulatory frameworks, competitive markets and the buy-in of key stakeholders, Mr Schipke said as the IMF released its yearly report on India.As with all structural reforms throughout the transition, he said it is essential to strengthen social safety nets to increase the benefits and reduce any negative implications.The yearly report lists more than 130 key policy actions that have actually been undertaken by the Indian government in the last one year as part of efforts to liberalise and reform the nation's economy.

On financial policy steps, the RBI has actually supplied significant, broad-based, and suitable monetary reducing through rate of interest cuts and an accommodative stance, Mr Schipke said.These were helped by time and state-contingent forward guidance on policy rates and, more recently, on asset purchases, to better anchor market expectations in the middle of unmatched unpredictabilities.

Different liquidity steps led to a cumulative injection of over 6 per cent of GDP during February 2020-- March 2021 and helped avoid a broad-based liquidity crunch for both monetary and non-financial corporates, he added.

Among monetary sector measures, the development of the National Property Restoration Company Ltd is a welcome development that shows the authorities efforts to protect financial stability and to attend to the issue of distressed bank assets, the IMF official said.Furthermore, he said the current recapitalisation of public sector banks (PSBs) and the privatisation of two public sector banks and one state-owned insurer are welcome advancements and we wait for more information .




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