New Delhi: In the wake of Tata's acquisition of Air India, the Finance Ministry has directed all ministries and government departments to clear the dues owed to the air carrier immediately.
While Tata is reported to have stopped extending credit facilities to the government, the Department of Expenditure also urged all the government departments to purchase air tickets in cash.
The Department of Expenditure has instructed this through a memorandum released on Wednesday.
So far, the different government departments had been following a memorandum issued in 2009 whereby air tickets only be purchased from Air India in case of the Central government bear the expenses.
Air India officials have previously cited issues of large government dues on account of VVIP travel, evacuation operations and other official travel as part of the reason for working capital issues.
On Monday, the Centre signed a share purchase agreement with the Tata group for the sale of Air India for Rs 18,000 crore.