Aviation investment a nod away for PIOs
Magic Air, a proposed private carrier, will have to wait for some more time before taking to the skies.
The Union Cabinet, on Thursday, forwarded a proposal to the Group of Ministers (GoM) on FDI that would allow Persons of Indian Origin to be at par with NRIs when it comes to investing in domestic airlines.
The prevailing rules do not permit investment by PIOs in the aviation sector, though they allow NRIs to do so.
The proposal was taken up by the Civil Aviation Ministry last February after Magic Air sought permission to launch its operations. The airline is promoted by a PIO businessperson, Nira Radia.
"The GoM on FDI will review the entire issue of PIO investment in domestic airlines and will come back to the Cabinet with its recommendations," Civil Aviation Minister Praful Patel said.
Headed by Agriculture Minister Sharad Pawar, the GoM also includes Patel, Finance Minister P Chidambaram, Commerce Minister Kamal Nath, Mines Minister Sis Ram Ola and Coal Minister Dasari Narayan Rao and Planning Commission Deputy Chairman Montek Singh Ahluwalia.
The Home and Commerce Ministries are learnt to have opposed the proposal on the grounds that there was no law at present to pinpoint accountability on PIOs in case of liabilities. The Department of Economic Affairs is understood to have suggested that the views of the Union Cabinet be taken on the matter.
As varied opinion prevailed among the concerned departments and ministries, the Cabinet decided to refer the matter to the GoM to elicit their opinion.
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