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In a bid to strengthen the financial position of Air India, the Indian government yesterday substantially increased the allocation for its holding company, National Aviation Company of India Ltd. (NACIL), by about Rs 4,029 crore (approx $806 million) in the interim Budget 2009-2010. Almost the entire increase in allocation for the Ministry of Civil Aviation (MoCA) was cornered by NACIL, with the airline being earmarked Rs 8,165.64 crore ($1.633 billion), up against the revised estimate of Rs 4,136.89 crore for 2008-2009.

MoCA received a total allocation of Rs 12,164.76 crore, compared with the revised 2008-2009 estimate of Rs 7,490.06 crore, a hike of almost Rs 4,675 crore. The move came in the backdrop of Air India seeking enhancement of its equity and a soft loan to meet the growing expenditure on its ongoing aircraft acquisition programme of buying 111 planes.

A provision of Rs four crore was also made, for salaries and other administrative infrastructure was also made in the non-plan budgetary allocation of the Ministry for the newly-created Airport Economic Regulatory Authority (AERA), whose Chairman and two members are yet to be appointed.

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