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FDI in civil aviation hiked to 49 per cent
Tribune News Service

New Delhi, October 20
Despite opposition from the Left Parties, major partners in the United Progressive Alliance government at the Centre, the Union Cabinet today decided to go ahead with a proposal of the Civil Aviation Ministry to hike the Foreign Direct Investment (FDI) in the sector from 40 to 49 per cent.

The Union Cabinet, at its meeting chaired here by the Prime Minister, Dr Manmohan Singh, decided to give its clearance to the proposal of the Civil Aviation Ministry.

Announcing the Cabinet decision, Civil Aviation Minister Praful Patel told reporters “today’s meeting has cleared the proposal to hike the FDI cap in the civil aviation sector to 49 per cent.”

The clearance from the Union Cabinet for an increase in the FDI, however, comes with a rider. The proposal to allow foreign airlines to pick up equity in the domestic carriers has been dropped. The Ministry of Civil Aviation had prepared a special note for the Cabinet to consider and clear.

According to the note, the hike in the FDI limit was part of the proposals made by Finance Minister P Chidambaram in his annual Budget for 2004-05.

While pegging the plan outlay for the sector at about Rs 1,621 crore, a hike of about Rs 135 crore from the revised estimate for the last fiscal, the government had said there was an “urgent need” for infusing huge amounts of capital in this sector.

In another decision, the Cabinet also decided to clear 82,000 applications of pilgrims going on Haj. This is 10,000 applications more than the last year.


Left has no objection
Tribune News Service

New Delhi, October 20
Left parties today stated that they had no objection to the Cabinet decision to hike FDI cap to 49 per cent in domestic private airlines.

However, there concerns still remained in other areas of the civil aviation sector.

CPM Politburo member Sitaram Yechury said the party had reservation like allowing foreign airlines to pick up stakes in domestic airlines and privatisation of airport, which are still under discussion with the UPA government.

Echoing similar views, CPI national secretary D. Raja said “It is acceptable to us but the government should confine the FDI hike to domestic private airlines alone and it should not be extended to other areas.

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