The Cabinet on Thursday cleared the Air India’s proposal to set up two subsidiaries for ground handling and engineering businesses.
The board of the airline had approved setting up of two special business units (SBUs) ? Air India Engineering Services and Air India Transport Services ? in 2010.
Under the proposed plan, the company will transfer some of its assets and manpower to these wholly-owned subsidiaries, which will be treated as a separate profit centres for engineering and ground handling services.
The creation of subsidiaries will reduce the airline’s manpower drastically from around 27,000 at present to 10,000 employees.
The Cabinet also approved revival of state-owned NEPA through infusion of funds of R234.18 crore. Besides, it gave a nod for waiver or conversion of R599.59 crore and reduction of equity share capital to the tune of R266.36 crore.
According to an official statement, the Cabinet gave its approval for 1997 pay scales to the employees, enhancement in the superannuation age of employees from existing 58 years to 60 years.
The revival plan consists product diversification by producing 46,800 tonnes per annum (TPA) of writing and printing paper and 36,200 TPA of newsprint with increased brightness.
“With the implementation of the revival package, the company will start making profit on a sustained basis from the second year and its dependence on the government for financial assistance for disbursement of salary and wages and statutory dues to employees shall cease and it will come out of the purview of BIFR,? an official statement said.
The Cabinet also approved continuation of interest subvention to public sector banks (PSBs), regional rural banks (RRBs), cooperative banks and Nabard. This would enable them to provide short-term crop loans up to R3 lakh at 7% per year during 2012-13. It also approved additional interest subvention of 3% per year to farmers repaying loans on time. The Cabinet permitted release of R10,901 crore for the subvention scheme.
