Finance Minister Arun Jaitley on 5 June said that the government has a proposal to exit Air India, however, the final call on the future of the debt-ridden national passenger carrier has to be taken by the Civil Aviation Ministry.

"Civil aviation is turning into a good success story in India…Therefore, how fair is it for government to occupy 14 per cent of the market share and then say some Rs.55,000-60,000 crore of tax payer's money must get into this whole process," said Jaitley.

"In addition to the existing players, if private sector players come, participate in Air India's proposed privatisation scheme, I think it will add to competition and add to quality, at what pace it will be done, in what manner it will be done is really for the civil aviation ministry to decide."

Replying to a question on government's ability to find a buyer for Air India without being able to write off a significant portion of its debt, Jaitley said: "I think the debt itself will have multiple components."

"The debt has a component which is the assets itself, which is the aircrafts. Then there are routes, then there is a lot of immovable property and out of the rest which is the government's responsibility, let us see what the civil aviation ministry decides and the government will then take a collective view."

On 2 June, government think-tank NITI Aayog had said that settling Air India's Rs.52,000 crore debt will be a "very difficult affair".

"Something has to be done on the debt issue…Whether the government writes off part of the debt or not," NITI Aayog Vice Chairman Arvind Panagariya had said.

"The government needs to resolve four big issues in Air India's strategic disinvestment…Whether or not to privatise, and if yes, then what is the universe of potential buyers… Whether even foreign buyers can bid." 

Besides the huge debt, Panagariya said the government also would need to consider whether to retain some stake in Air India since it is the national carrier.

In a recent report to the Civil Aviation Ministry, the NITI Aayog has recommended strategic disinvestment from the loss-making Air India, by which government control would be transferred to a private owner.

On 30 May, Civil Aviation Minister Ashok Gajapathi Raju said that several options and alternatives are available to restore the financial health of the national passenger carrier.

According to the minister, the NITI Aayog has already submitted several suggestions to restore the financial health of the national passenger carrier and these are being examined.