Plan panel favours hiking FDI limit in aviation

NEW DELHI: Planning Commission has strongly advocated increasing FDI limit in civil aviation to improve its competitive efficiency even as the Union cabinet has deferred a decision on the issue.
"Opening up of the civil aviation sector is necessary to overcome capacity constraints. Foreign equity share for domestic sector could also be increased for improving competitive efficiency," the Commission has said in its draft Tenth Plan document to be tabled before the full Planning Commission chaired by Prime Minister Atal Bihari Vajpayee on October five.
It might be recalled that the Union Cabinet had in its meeting on September 18, deferred a decision on hiking FDI limit in civil aviation, insurance and telecom sectors.
The proposals for consideration of the cabinet had been prepared on the basis of recommendations made by a Steering Committee on FDI for the 10th Plan headed by Planning Commission member N K Singh.
The Singh committee had recommended foreign equity cap on civil aviation to be raised to 49 per cent from 40 per cent and foreign airlines to be allowed to invest within this cap.
Setting a target of 7.5 billion dollars annually from FDI inflows compared to $8-9 billion suggested by the Singh committee, the draft plan document said international routes could be auctioned to private Indian operators and foreign airlines could be allowed to participate in provision of domestic air services.