Here’s hoping UPA has finally changed

After dawdling for nearly two years, the government seems to have got its policymaking mojo back. The Foreign Investment Promotion Board, which often makes a mockery of the word ‘promotion’ in its monicker, has cleared the investment proposal of AirAsia in a trice, paving the way for the first new overseas investment in the aviation market in many years.


Last September, the government overhauled aviation policy, making it possible for foreign airline companies to invest up to 49% of the total equity in domestic carriers. AirAsia will be partnered by the Tata group.

This will be a long-delayed return to aviation by the conglomerate: in 1932, J R D Tata and Nevill Vintcent piloted the first commercial flight from Karachi to Bellary, via Bombay and Madras, carrying mail.

The Tatas continued to run Air India until it was nationalised in 1953. Jet Airways, now India’s largest private airline, is also negotiating a deal with UAE’s Etihad, to bring in equity for further expansion. There are more signs of life coming from policymakers. The finance ministry has asked all state-owned companies that have surplus cash on their books to start investing this in productive ways.

To make sure that its instructions are followed, the ministry has said that any uninvested funds will have to be returned to the exchequer as special dividends. Getting state-owned companies, many of them among India’s largest corporate entities, to put money into new projects or expansions is the quickest way to boost investment.

Now, several key ministries in government must put their heads together to cut red tape, which has proliferated in recent years, slowing down projects and investment growth. Agencies like the NHAI, responsible for building roads and highways across the country, cannot spend money, because of inter-ministry squabbles, delay in getting clearances or ongoing litigation.

This should not happen in a government where all ministries work together purposefully to push investments and boost growth above the current, sluggish 5%-odd levels. Having started on the path of activist policymaking, the government should not lose steam now.