The Cabinet Committee on Economic Affairs is likely to take up the issue of allowing 49 per cent foreign direct investment (FDI) in the aviation sector at its meeting scheduled for Friday.
The Department of Industrial Policy and Promotion (DIPP) has already given its nodto the proposal. However, it is not clear if the government has been able to get its ally Mamata Banerjee-led Trinamool Congress, which had earlier opposed the move, on board with the decision.
The Trinamool Congress has also strongly opposed allowing 51 per cent FDI in multi-brand retail, another important reform that has been held up due to strong opposition from within the UPA and opposition parties.
Officials in the DIPP officials said the Industry Ministry had already sent its approval note of approval to the Cabinet.The Civil Aviation Ministry is understood to have recommended that while giving 49 per cent stake to foreign airlines in domestic carriers, the management control should remain in the hands of Indians, who will also constitute two-thirds of the strength of board members. However, the move is unlikely to attract any major investments in view of the fact that the sector is in bad shape now.
Multi-faceted crisis
Meanwhile, International Air Transport Association (IATA) President Tony Tyler had remarked that India’s aviation sector was faced with multi-faceted crisis, and if the critical domestic problems of this sector were not addressed immediately, foreign investors might not line up even if they were offered 49 per cent stake.
As part of the reforms, the Civil Aviation Ministry has already proposed revamping the Directorate-General of Civil Aviation and replacing it with a Parliament approved Civil Aviation Authority.
