According to highly-placed sources, the airline, which got a meagre Rs 100,000 as extra budgetary support in the interim budget, might not even land a spot in the expenditure document this time.
However, in the interim budget, the government had allocated Rs 2,600 crore to Air India Asset Holding Ltd, a SPV which is being used to park the majority of over Rs 55,000 crore debt of the airline.
On June 27, the Central government decided to restart the divestment process of national passenger carrier and its five subsidiaries.
As per the Ministry of Civil Aviation, continued support from the government had resulted in improvement of financial and operational performance of the airline.
The development comes after the Air India Specific Alternative Mechanism (AISAM), in a meeting last year, decided against divestment at that time due to issues like volatile crude oil prices and adverse fluctuations in exchange rates.
"However, continued support from the government had resulted in improvement of financial and operational performance of Air India. As per the recommendations of AISAM, the government will now go ahead with the process of disinvestment of the company," the Ministry said in a statement.
In December last year, the Centre had prepared a revival plan for the airline, comprising a comprehensive financial package and sale of non-core real estate assets.
The plan comprised of several major elements such as a comprehensive financial package including transferring of non-core debt and assets to a SPV (special purpose vehicle) and strategic disinvestment of subsidiaries.
Besides, the Centre infused Rs 2,345 crore into the financially strained national carrier under its 'Turn Around Plan'.
In addition, an inter-ministerial panel has decided to divest the government's stake in AIATSL.
The revival plan had come after government's efforts to off-load a majority stake in the airline failed. On May 31, 2018, "no response" was received by the government.
( With inputs from IANS )