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The withdrawal of the Tata group's proposal to set up a domestic airline should be a huge embarrassment to the government. Here we have one of the country's premier business houses interested in investing in an industry where there is clearly scope for another player, and instead of clearing the proposal within days, the aviation ministry chooses to adopt all sorts of stalling tactics. So much for the government being investor-friendly.
More importantly, allegations have been levelled that it is concerted lobbying by a private airline which is behind the government's lack of enthusiasm for the Tata project. These are serious allegations, which amount to saying that the government is deliberately favouring one business house over another. Clearly, a thorough inquiry on the subject is called for. This inquiry must fix responsibility for the delay which has occurred in clearing the proposal and inform the public about the reasons for the delay. This is necessary for several reasons -- first, the governmentmust clear itself of the allegations of partiality levelled against it; and secondly, the domestic and foreign business community needs to be reassured that delay in clearing proposals will be dealt with severely. An inquiry will salvage some of the government's lost credibility. The entire three-year long episode reflects a remarkable continuity in government policy -- when it came to scuttling the proposal by the Tatas, the Congress, United Front and BJP government seem to have had no differences. The reasons for delaying the proposal were different, but the end result was to ensure that the airline did not fly. Clearly, this is either a reflection of an extraordinary unity of purpose cutting across political lines or an illustration of the fact that, for powerful vested interests, it does not much matter which government is in power. If this is what happens to the Tatas, with all their clout, what earthly chance does an ordinary entrepreneur have?
Liberalisation hasn't changed the old attitudes at all.The government also needs to formulate a comprehensive industrial policy, which will lay down the ground rules about foreign investment in different sectors of the economy. Industry minister Sikander Bakht has been quoted as saying that he has no reservations about foreign stakes in airlines while the civil aviation minister clearly thinks otherwise. What exactly is the rationale for allowing 100 per cent foreign equity in cigarettes while aviation is reserved for a public sector company widely perceived as inefficient? These issues need to be addressed. The recently constituted economic think-tank at the prime minister's office, which should be less susceptible to pressure by vested interests, must be pressed into service to formulate a policy immediately.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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