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Taskforce toes Cabinet line, vetoes foreign airlines' equity in domestic sector

The Prime Minister's Taskforce on Infrastructure has ruled against the controversial recommendation to allow equity participation by foreign airlines in the domestic sector.

The Union Cabinet too had ruled against equity by foreign airlines in domestic airline companies.

"In view of the recent Cabinet decision to continue the present policy (which bars participation of foreign airlines in the domestic sector) we have decided not to pursue it," K C Pant, chairman of the taskforce, said.

The taskforce had earlier recommended equity participation by foreign airlines in the domestic aviation companies.

The issue has been controversial in India. Opponents of foreign airlines contend that cash-flush foreign aviation companies would eat Indian companies alive if given a free reign in the domestic sector. In 1998, the government disallowed Singapore Airlines to form a joint venture with the Tatas.

The taskforce would draft the Integrated Transport Policy, integrating various modes of transport to meet future demand, Pant said.

The taskforce would help the civil aviation ministry to decide on setting up more international airports in India and increasing the share of airports' revenue from shops and hotels.

India's transport demand is expected to grow above 9 per cent annually. The forecast is based on a GDP growth projection of 7.5 per cent per annum.

UNI

June 22, 1998: Govt to allow 40 pc foreign equity in domestic airlines

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