Financial Daily from THE HINDU group of publications
Thursday, Jun 17, 2004
Financial Daily from THE HINDU group of publications Thursday, Jun 17, 2004 |
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Foreign Direct Investment CII for 49 pc FDI cap in aviation Our Bureau
New Delhi , June 16 THE Confederation of Indian Industry (CII), while asking the Government to allow foreign direct investment (FDI) into the domestic aviation sector up to 49 per cent, has said that foreign airlines should also be allowed to pick up equity in the domestic airlines. At a meeting with the Minister for Civil Aviation, Mr Praful Patel, here on Wednesday, the chamber again urged the Government to categorise aviation turbine fuel (ATF) as a `declared good' attracting a sales tax of four per cent across the country so as to make air services more competitive. The chamber's suggestion on FDI echoes the thinking of the high-powered Naresh Chandra Committee, which recently submitted its report on the `road map for the civil aviation sector'. The Committee had recommended that foreign equity investment norms pertaining to both domestic and international scheduled air transport services should be further liberalised, to allow up to 49 per cent foreign investment. It said that as regards investment by foreign airlines, investments up to 49 per cent may be allowed with the approval of the Foreign Investment Promotion Board (FIPB). Besides, it had also recommended that domestic operators be charged domestic rates at all airports within the country. At present, domestic operators are charged international rates when they operate to designated international airports though they receive no special or additional facilities. At the meeting today, the need for promoting concepts of heliports and helipads was also stressed. Besides, the need of improving domestic air cargo services as they perform a vital function in the economy was also emphasised.
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