The Hindu Business Line : Cabinet to consider hiking FDI in civil aviation to 49%

THE Union Cabinet, which is scheduled to meet here on Wednesday, is likely to consider a proposal to hike the foreign direct investment limit in the domestic airline industry from the existing 40 per cent to 49 per cent.

However, the issue of allowing foreign airlines to pick up a stake in domestic airlines is not part of the official agenda, sources said.

In July this year, presenting the Union Budget for 2004-05 the Finance Minister, Mr P. Chidambaram, had proposed raising the sectoral cap for FDI in the civil aviation sector to 49 per cent.

In addition, the Cabinet is also expected to take up the issue of writing off liabilities and dues of about Rs 183 crore, which the feeder airlines Vayudoot had incurred. The airline was eventually merged with Indian Airlines close to a decade ago. IA had previously written to the Government seeking a moratorium on repayment of these liabilities.

Besides, the quantum of Haj subsidy, which the Government should provide is also likely to be taken up at the meeting.

Minister meets PM: Meanwhile, the Minister for Civil Aviation, Mr Praful Patel, met the Prime Minister, Dr Manmohan Singh, on Wednesday during which a detailed presentation was made on various aspects connected with the sector. Official sources said that, at the meeting, the initiatives being taken for modernisation of airports, strengthening the airlines and general policy matters were discussed.

Besides, the steps which have been taken by the Ministry to accommodate the views of the Left Parties and unions of the Airports Authority of India (AAI) who are against the method of modernisation of the airports in Mumbai and Delhi were explained to the Prime Minister.

During the meeting, Dr Singh is said to have shown a keen interest in the initiatives being taken at the new green field airport projects coming up in Bangalore and Hyderabad.

The Prime Minister also inquired whether some method for funding the development of non-metro airports could be found independent of financial support from the Government.

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