Bidding for AI
The government has hired EY to advise it on the Air India sale process, which is likely to take about 6-9 months. Indigo, run by Interglobe Aviation Ltd has expressed interest in Air India. Bird Group, Menzies Aviation, Livewel Aviation, and Turkey’s Celebi Aviation Holding have also shown interest in Air India subsidiaries.
Air India had total debt of about Rs48,877 crore at the end of March 2017 -- Rs17,360 crore of aircraft loans and Rs31,517 crore of working capital loans. Air India has already received nearly Rs27,000 crore of the Rs 50,000 crore equity promised by the government in 2012 The airline has a fleet of about 140 planes with 17% share of traffic on routes linking India to international destinations and about 13% of the domestic market
Meanwhile, Vistara will make its international debut later this year. The airline, which operates 17 Airbus A320 aircraft, will see three more aircraft join the fleet by March followed by one each in May and June.
The airline will go international in the second half of 2018 after it gets designated as an international carrier by the government and wins flying rights. The airline plans to fly on routes that already have flights as also to new cities where there is a business case. they are not fully factoring in the expected pickup in growth in the later months of 2017-18, related to a favourable base effect.
She said her firm expects GDP growth in 2017-18 to be 6.7%, “higher than the advance estimate” of 6.5% released on Friday.
Indeed, the CSO’S 6.5% estimate assumes a Gross Value Added of 6.1%, lower than 6.7% growth projected by the Reserve Bank of India in its latest bi-monthly monetary policy review on 6 December. The Gross Value Added is the GDP less net taxes.
The nominal GDP, or gross domestic product at market prices, is expected to grow at 9.5% against 11.75% assumed in the 2017-18 budget presented last year. The nominal GDP will be used as the benchmark for most indices in Union Budget 2018 to be presented by finance minister Arun Jaitley on 1 February.
Chief Statistician of India TCA Ananth said the lower than anticipated nominal GDP growth will lead to “marginal slippage” in the fiscal deficit target for 2017-18 from 3.24% of GDP estimated in the budget to 3.29% assuming government borrows what it budgeted for the year. However, since government has increased its spending through supplementary demands for grants and has communicated that it may borrow Rs 50,000 crore more by 31 March, the actual fiscal slippage could be more. This may also make it more difficult for finance minister Arun Jaitley to stick to his fiscal consolidation road map of bringing down fiscal deficit to 3% of GDP by 2018-19.
The CSO showed that the agriculture sector is expected to grow at 2.1% in FY18, slower than 4.9% a year ago, while manufacturing is likely to decelerate sharply to grow at 4.6%, compared with 7.9% a year ago.
Electricity and trade, hotels sectors are the only sectors that are expected to grow at a faster rate of 7.5% and 8.7% in FY18 than in FY17.
While growth in private consumption is expected to dip to 6.3% i n FY18, i nvestment demand growth is estimated to pick up to 4.5% during the same year.
Public expenditure which used to be the driver of economic growth in the previous year is likely to slow down to 9.4% against 11.3% a year ago.
Since the first advance estimates of GDP is based on data only for seven to eight months, most analysts believe the second advance estimates to be released on 28 February, based on actual data for three quarters, and the provisional estimate to be released in 31 May should give a better picture of the health of the economy.