This amount has been reflected in the revised forecast of total expenditures in 2021-22.

“Compared to a total expenditure of Rs 34.83 lakh crore projected in the 2021-22 budget forecast, the revised estimate is Rs 37.70 lakh crore. The revised capital expenditure estimate is Rs 6.03 lakh crore. This includes an amount of Rs 51,971 crore for the settlement of outstanding secured liabilities of Air India and its other miscellaneous liabilities,” Finance Minister Nirmala Sitharaman said during the budget speech.

Tata Group acquired 100% stake in the airline in a deal struck on January 27 for Rs 18,000 crore. Of this amount, Rs 15,300 crore was incurred as debt and Rs 2,700 crore was paid to the Center in cash. To service high-cost debt with the airline, a consortium led by the State Bank of India has approved a plan to provide long-term debt to the Tata Group.

According to the revised estimates for 2021-2022, the SPV – AI Asset Holding Ltd – received Rs 62,057 crore, of which Rs 36,254 crore was infused into equity for the repayment of past government guaranteed borrowings from Air India; Rs 12,357 crore for repayment of loans for sale and leaseback for aircraft; and Rs 13,446 crore for repayment of other dues and debts.

Air India’s huge debt, stemming from years of loss-making operations, has been one of the major obstacles to past government divestment attempts. During the latest divestment process, the government changed the bidding conditions to allow potential bidders to bid at enterprise value, meaning they could decide how much debt they would like to assume.

Moreover, after finalizing the decision to sell its stake in Air India, the government for the past two years had stopped injecting funds into the airline and instead guaranteed its loans.