The funds will be raised by sale of Air India subsidiaries Air Transport Services Limited, Air India Engineering Services Limited and Airline Allied Services Limited

The government attempted to sell the debt-laden carrier in May last year but failed. In June, a committee led by Finance minister Arun Jaitley decided to scrap the stake-sale plan for the time being.

Can India's premier airline be rescued?

The government will provide a total of Rs 3,900 crore for servicing Air India's loans transferred to the SPV, according to interim Budget presented on February 1.

The government would offload 98 per cent stake through strategic sale and the remaining 2 per cent would be offered to the employees of AIATSL.

The sale of land, building and other realty assets is part of the government's plan to trim the Rs 55,000 crore debt burden of Air India

After the implementation of the revival plan, the airline's annual loan interest liability payout of Rs 4,400 crore would be drastically reduced by Rs 2,700 crore to just 1,700 crore, which will help the airline in paring its debt.

A ministerial panel headed by Finance Minister Arun Jaitley gave the green light to sell 27 acres of Air India's land in the capital's upmarket Vasant Vihar to public sector company NBCC.

Air India is reeling under a huge debt burden of over Rs 50,000 crore and the government is planning to sell its non-core subsidiaries of the national carrier.