Air India divestment | Centre may limit employee benefits till private owner takes over: Report

AI employees had in 2020 petitioned the Civil Aviation ministry to continue medical, leave encashment and provident fund benefits for retired employees in current form even after privatisation. (File image of an Air India aircraft)

The Centre is looking to limit benefits of Air India employees till a private owner takes over reigns. The move is being viewed as a possible 'template' for the Centre's divestment proceedings of public sector enterprises (PSEs), the Times of India reported.

The national carrier has been a "cash guzzler" for the government and is a "top priority company for divestment this year", the report added.

Sources told the paper the new development would allow the Centre to "tweak packages in a way that benefits sections where our wants to make them more attractive".

Moneycontrol could not independently verify the report.

Notably, AI employees receive benefits over and above the usual health and provident fund schemes. These include a fixed number of free tickets per year for a family comprising employee, their spouse and dependent children.

This is a "concern" that many bidders have put forth to three governments, which has prompted "internal deliberations" in the government, the report added.

In fact, apart from the COVID-19 pandemic, employee benefits and "some other aspects being discussed" has delayed divestment, it said.

Notably, the Centre is looking to call for bids in September and efforts are being made to ensure the same goes through.

“It may be taking a little longer but some of the issues that are decided here will also be used in case of other companies that will be privatised in the coming months,” a senior government officer told the paper.

AI employees had in 2020 petitioned the Civil Aviation ministry to continue medical, leave encashment and provident fund benefits for retired employees in current form even after privatisation.