Elaborating on the new policy, civil aviation minister Ananth Kumar said companies having foreign airlines' equity participation, which were already operating in the domestic sector, would be advised to disinvest the equity within a period of six months.

However, foreign equity up to 40 per cent and investment by non-resident Indians or other commercial borrowers up to 100 per cent will be permitted in the sector, he said.

Barriers on the exit and entry of operators from the civil-aviation sector have been removed in the new policy that now requires only a pre-entry scrutiny of applications to verify financial soundness, maintenance, security and safety aspects of operations and human-resource development proposed to be undertaken by the applicant.

Choice of aircraft type and size has been left to theoperator, Kumar added.

He said Tatas have withdrawn their airlines proposal to operate domestic scheduled air-transport service on September one this year.

Air India divestment

Civil aviation minister Ananth Kumar also said the report of the disinvestment commission on Air India was under the ministry's consideration. Replying to a question in Rajya Sabha, the minister said the Kelkar committee appointed to suggest guidelines for the privatisation of Air India had not yet submitted its report.

Delhi hub project

There is a proposal to develop Delhi as a "major cargo-hub", the minister said. Besides, a parallel joint venture export terminal with international state-of-the-art technology and systems was also being planned with Airports Authority of India.

Work is in progress for the expansion of the cargo terminal at Delhi airport at a cost of Rs 42 crore which will be completed by April, 2000, Kumar said.

Capacity increase

While Indian Airlines has already increasedcapacity and introduced new routes this year, Jet Airways and Sahara India Airlines have proposed new flights, Kumar said. With the proposed induction of five more aircraft, Jet has proposed additional frequencies and new routes in the current financial year, while Sahara is in the process of finalising the induction of turbo-prop aircraft that will be utilised for short-haul sectors.

The minister said because of the shortage of aircraft capacity and insufficient traffic potential, Air India was unable to provide direct international flights to and from Amritsar.

The airport at Ahmedabad, which has been renamed as Sardar Vallabhai Patel international airport, is being upgraded to international standards for the operation of B-747 type of aircraft.

Government wings consulted before Fema formulation, says Sinha

Finance minister Yashwant Sinha today repudiated opposition charges in Rajya Sabha that the enforcement directorate was not consulted while formulating the Foreign Exchange Management(Fema) Bill.

Replying to supplementaries during question hour relating to powers of the ED, he said, "Government consulted everyone and enforcement directorate is a part of government".

He told Gurudas Dasgupta (CPI) that under the proposed act, the Reserve Bank was being given more powers as under Fema, foreign-exchange violation would be treated as a civil offence and not a criminal one.

Members had raised objections over the limited powers of the ED related to raids and seizure and punitive action in the Fema bill, which seeks to replace the Fera of 1973.

Sinha said the earlier acts of 1947 and 1973 were brought at a time when the foreign-exchange position of the country was precarious and each and every outgo was viewed microscopically.

Now with current-account convertibility and the resultant easing of inflow and outflow of foreign exchange, there was a need to ease the Fera and since amendments would not have been enough, a new bill was introduced, he said.

Income-tax returns

Theincome-tax department has started collecting information of persons and notices were being issued to those who had not filed their tax returns, minister of state for finance KMR Janardhanan told Rajya Sabha on Tuesday.

The minister said the government had made it mandatory for every person, fulfiling two of the four criteria like ownership of immovable property, ownership of motor vehicles, subscription for a telephone, expenditure on foreign travel and membership of certain clubs or holders of credit cards, to file returns.

He said all the returns received were examined by the department. Besides, the department was also collecting information through its various wings on cases of suspected tax evasions. Search and seizure operations were also undertaken by the department through its investigation wing, he said.