The Confederation of Indian Industry has recommended that foreign airlines be allowed to pick 49 per cent stake in domestic carriers saying it would help the aviation sector gain sophisticated technology and best expertise. The CII's recommendation is in stark contrast to the prevailing stance of the government.
Though the government has decided to allow FDI in the aviation sector with a cap of 49 per cent, it currently does not allow foreign airlines to pick the stake.
In its reaction to the Naresh Chandra Committee recommendations, the CII recommended that foreign airlines be allowed entry into the sector so as to help Indian carriers gain the best of technology, expertise, procedures and systems, according to a CII release.
The CII, however, welcomed the committee's recommendations to replace aviation related taxes and fees with a single ad valorem cess, but said the recommended rate of five per cent was "extremely high and must be limited to two per cent," the release said.
It also sought aviation turbine fuel to be designated as 'declared good' under the central sales tax act to bring the tax level to four per cent for all aviation operators.
The industry body also suggested fast-track immigration clearance for upper class passengers, separate counters for NRIs and other steps to speed up the process.
On the route dispersal guidelines, the CII said the ratio of granting flying rights to carriers be reworked based on the current market situation and lucrative routes.
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