Air India debt unsustainable, should go to private hands: Arvind Panagariya

New Delhi: Air India should be privatised as its debt level is "simply not sustainable" and government action on the airline's future course is likely within six months, Niti Aayog vice chairman Arvind Panagariya said on Thursday.

The government is looking at various options, including possible privatisation, to revive the loss-making national carrier and Tata group is believed to be interested in buying stake in Air India.

"I think really where Air India stands now, it is almost a matter of existence. The debt is already about Rs 52,000 crore (and) we are adding of Rs 4,000 crore debt every year so this is simply not sustainable," Panagriya said.

In an interview to CNBC-TV18, he said: "In the end, I think the airline does need to go with management in the private hand."

While discussions are going on to decide the future course of action for Air India, Niti Aayog has recommended complete privatisation of the airline.

Panagariya said further that something should be happening this year with respect to Air India.

"We are in June, so we have six months (more) this year. You know, actually something happens or not depends on buyers but from the government side, we should see some action in the next six months," he added.

Noting that successive governments recognised the problems with the airline but failed to act on them, Panagariya said Prime Minister Narendra Modi is bolder and more decisive.

Air India is surviving on Rs 30,000 crore bailout package extended by the previous UPA government.

Recently, Finance Minister Arun Jaitley had said the aviation ministry has to explore all possibilities "as to how the privatisation of Air India can be done".

On Wednesday, sources said Tata group was evaluating options on buying stake in the airline.

Air India traces its roots to Tata Airlines, which was formed way back in 1932. Set up by Tatas, the carrier was made a public company and was rechristened as Air India. Later, it was nationalised.

Tatas had tried to acquire stake in Air India earlier as well.