The prime minister's office (PMO) on Tuesday denied any divide within the government over the India-UAE Bilateral Air Services Agreement and the Jet Airways-Etihad deal even as civil aviation minister Ajit Singh said both deals would go ahead, albeit with some changes.
Several opposition leaders, including the BJP's Jaswant Singh, the CPI(M)'s Sitaram Yechury and the Janata Party's Subramanian Swamy had leveled serious allegations against the deals. These included charges that the agreements undermined India's security.
Defending the Jet-Etihad deal, Singh said: "It is such an important deal... the first big deal in aviation. In terms of FDI, it is bigger than any other deal this year. There are so many dimensions to it. Those opposing the deal are long on politics and short on facts."
However, the PMO, in an attempt to preclude any allegations of wrongdoing, has directed the civil aviation ministry to place it before the cabinet for approval.
This is seen as an attempt by the Prime Minister to blunt the opposition's charges.
His office clarified: "The PM is neither washing his hands off the Bilateral Air Services Agreement nor is the PMO trying to do a U-turn on the issue now."
The FIPB had objected to the Rs 2,058-crore Jet-Etihad deal on the grounds that it gave the Abu Dhabi national carrier disproportionate powers and almost effective control of the Indian carrier despite a relatively small 24% stake following the deal.
This deal will now have to be reworked so as to satisfy all existing norms and FIPB's objections.