Notwithstanding a political storm over opening the multi-brand retail,the Home Ministry and the Planning Commission have supported the draft Cabinet note on allowing foreign carriers to buy 26 per cent stake in the cash-starved Indian private airlines,sources said. Crucial views of the Finance Ministry are yet to be received by the Department of Industrial Policy and Promotion (DIPP),which had circulated the draft note,they said. "Most of the ministries,including the Ministry of Home Affairs and the Planning Commission,have sent their comments in favour of the proposal. We are awaiting Finance Ministry's views which are expected soon," an official said While the proposal has been examined at the official level,Finance Minister Pranab Mukherjee is yet to take a final view,sources said. It remains to be seen how the Finance Minister,who is a trouble-shooter for the government which faces major opposition to FDI in retail,views it. Parliament has been paralysed as the stalemate persists since beginning of the winter session on November 21. The DIPP had proposed 26 per cent foreign direct investment (FDI) by foreign airlines into the domestic industry in the backdrop of Kingfisher Airlines slipping into a severe debt crisis and several others facing resource crunch. However,the Aviation Ministry is for fixing a cap of 24 per cent cap on the FDI. At present foreign investment up to 49 per cent is permitted in the domestic airlines,but the foreign carriers are disallowed. The DIPP argument is that not much interest will be shown by foreign carriers unless they are given significant stake with a say in running the domestic carriers. There is a major difference between the 24 per cent and 26 per cent stake in the sense that in the case of latter,the investor can have a say in the decisions taken by the board of directors,as per the provision of the Indian corporate laws.
