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Cabinet defers decision on open sky policy

BS Political Bureau in New Delhi | February 05, 2004 08:21 IST

Jet Airways and Air Sahara will have to wait for some more time to get their slice of the cake from a poll-bound government.

Just as Wednesday's Cabinet meeting was due to take up the issue of allowing private domestic airlines to fly abroad, Finance Minister Jaswant Singh said the meeting should end as the ministers were needed to be present in the Lok Sabha for the passage of the vote-on-account.

According to government sources, while all other agenda items were cleared, the Cabinet could not take a decision on the open sky policy.

The agenda items cleared included election sops like raising the income limit for determining the "creamy layer" among the other backward castes to Rs 250,000 from the present Rs 100,000.

The sources said senior leaders in the government had taken a conscious decision not to consider the open sky policy because of sharp differences within the ruling National Democratic Alliance.

Janata Dal (United) ministers had opposed the proposal on the ground that it would hurt the finances of the national carrier, Indian Airlines.

What is particularly worrying for Finance Minister Jaswant Singh is the fact that the proposal to allow private airlines to fly abroad will entail heavy financial losses for Indian Airlines and Air-India, which stand to lose bilaterals.

"The finance minister is expected to provide a package for Indian Airlines and Air-India if the proposal is cleared," a source said. That the issue was politically sensitive was realised by the government when the Congress too urged it not to take it up on the eve of Lok Sabha elections.

Officials in the civil aviation ministry said the proposal could now be taken up only after the elections.

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