Two weeks after assuring that foreign airlines would soon be allowed to invest in domestic carriers, the aviation ministry has become more realistic and wants to delay the approval pending complete political consensus.
Civil aviation minister Ajit Singh on Thursday said the ?proposal will be approved only after a consensus is built among all the allies?.
Though the minister did not specify how much time the exercise would take, sources said that the statement is seen as admission that the contentious proposal may get delayed further. Already, inter-ministerial differences over the quantum of stake to be offered to foreign airlines has delayed finalisation of the FDI proposal for approval o the cabinet.
Fresh trouble over the proposal propped up after an informal meeting of the minister and some members of the Mamata Banerjee?s TMC on Wednesday. The UPA ally has already hinted that it is not going to support the government move.
?TMC members have conveyed that the Party was not in favour of allowing foreign airlines to pick up stakes in domestic carriers. It (TMC) wants the aviation ministry to first focus on completion of modernisation of Kolkata airport,? a government official said.
Singh denied any formal meeting with the TMC. ?No, there was no official meeting. Though we are in negotiation with allies,? Singh told Financial Express. The aviation minister is likely to meet the TMC supremo Mamata Banerjee next week to seek her Party’s support on the proposal. Trinamool has also refrained from sending its response to the proposed move of the aviation ministry, which has broken the convention by soliciting every ally?s comment on a proposed administrative decision of the government.
An aviation ministry official said, ?Though it is clear that the TMC is not in favour of the idea, there is a scope to negotiate and get their support?.
The aviation ministry has been trying to push for FDI in airlines for a long time. Singh had recently said that the proposal under which foreign airlines could buy up to 49% stake in Indian carriers was finalised and could be cleared by the Cabinet as soon as in its next meeting. However, there was no decision in this regard even in the Cabinet meeting held on Thursday.
The airline industry experts feel that though the it would be difficult for the domestic carriers to woo investors in the present scenario, the proposal, when cleared, would be an opportunity for the airlines to stay afloat.