As the debt-laden civil aviation industry battles hard to stay afloat, the government said on Tuesday that it would kickstart the process to allow foreign airlines 49 per cent stake in Indian carriers, signalling a major shift in the UPA government's policy.
The decision was taken at a meeting here between Finance Minister Pranab Mukherjee and Civil Aviation Minister Ajit Singh. The meeting also decided to immediately release Rs.150 crore for the payment of a portion of pending salaries and allowances of Air India employees, including pilots.
“We will bring a note for the Union Cabinet now,'' Mr. Singh told reporters after the meeting.
On the FDI cap on foreign airlines, the Minister said: “As of now, 49 per cent FDI is already there. The question was on allowing [international] airlines to participate in the FDI. The CoS [Committee of Secretaries] has also recommended that FDI limit should be raised to 49 per cent.''
According to Mr. Singh, FDI was one of the factors which would help the already stressed aviation industry to survive the current financial crisis.
