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Tolls & Taxes: Collection machine

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Consumer Protection (Amendment) Bill, 2011: More power to consumers?

Will our interests be better-protected with a new law?

The Consumer Protection Act, 1986...

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GoM to debate on foreign airlines’ equity in Indian carriers next week

A Group of Ministers on civil aviation, headed by finance minister Pranab Mukherjee, is likely to meet on 9th February to debate on major issues like allowing foreign carriers to have a stake in domestic airlines and sales tax on jet fuel

New Delhi: A proposal to allow foreign airlines to pick up equity in Indian carriers is likely to be introduced before the Budget Session of Parliament, reports PTI quoting civil aviation minister Ajit Singh.

A Group of Ministers (GoM) on civil aviation, headed by finance minister Pranab Mukherjee, is likely to meet on 9th February to debate on major issues like allowing foreign carriers to have a stake in domestic airlines and sales tax on jet fuel.

“We are preparing the proposal (on investments by foreign airlines). It would be sent to the commerce ministry and from there to the Cabinet,” Mr Singh told reporters here.

Asked whether a decision would be taken before the Budget Session, he said “I hope so.”

Regarding slashing of sales tax on aviation turbine fuel (ATF), Mr Singh said “I have talked to the finance minister. The matter was to come up before the GoM on Tuesday. Now the question will come up for discussion on 9th February.”

Currently, the government allows foreign direct investment (FDI) up to 49% in Indian carriers by non-airline players but bars foreign airlines from investing in them, primarily due on security grounds.

During a meeting Mr Singh had with Mr Mukherjee earlier this month, the government had agreed for the first time to draft a cabinet note proposing 49% cap on FDI by foreign carriers in domestic airlines.

The civil aviation ministry had proposed 24% cap while the commerce ministry’s Department of Industrial Policy and Promotion (DIPP) had suggested a 26% limit.

Owing to high jet fuel and interest costs, three major private airlines—Kingfisher, Jet Airways and SpiceJet—have reported heavy second quarter losses.

Asked about Kingfisher promoter Vijay Mallya’s proposal on state governments underwriting or buying seats in flights of Air India or other private carriers, Mr Singh said, “He (Mallya) has asked the states. It is a federal system. He has requested the state governments; let us see what they say.”

The minister further commented, “If I reply, will (West Bengal chief minister) Mamata (Banerjee) accept my statement?”

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