‘There is still a question mark over the political clearance’
The Cabinet Committee on Economic Affairs (CCEA) is likely to take a call on Friday on the fate of the long-pending issue of allowing 49 per cent foreign direct investment (FDI) in aviation, a move expected to give relief to domestic carriers.
“The FDI in aviation has been listed in the agenda of CCEA,” Commerce and Industry Minister Anand Sharma told reporters here. However, there was still a question mark over the political clearance for the move as the UPA ally Trinamool Congress and West Bengal Chief Minister Mamata Banerjee had already opposed the move.
The Finance and Civil Aviation ministries, along with the Commerce and Industry Ministry, have already given thumbs up to the move to amend the FDI guidelines for the aviation sector. The Department of Industrial Policy and Promotion (DIPP) had moved a Cabinet note in this regard.
At present, India allows foreign investors, not related to airline business, to buy up to 49 per cent stake in domestic airlines, but foreign carriers are not permitted to invest in them. Following demands from the cash-strapped aviation industry, the government had, in January, launched the process.
Allowing foreign airlines to buy stake in domestic carriers is expected to benefit Kingfisher Airlines, which is burdened with a debt of over Rs.7,000 crore.
Kingfisher has been strongly pitching for allowing FDI in domestic carriers while other major carriers such as Jet Airways and the only profit-making airline, IndiGo, are opposed to it.
http://www.thehindu.com/todays-paper/tp-business/article3894975.ece
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