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Chidambaram, Jayanti to draft new aviation policy

Prime Minister Inder Kumar Gujral has entrusted Finance Minister P Chidambaram and Minister of State for Civil Aviation Jayanti Natarajan -- Tamil Maanila Congress leaders -- with the task of drafting a new civil aviation policy.

While the TMC leaders -- with the active assistance of Dravida Munnetra Kazhagam leader and Industry Ministry Murasoli Maran -- are giving finishing touches to the new policy, this has led to hostility between Civil Aviation Minister Chand Mahal Ibrahim and the prime minister.

The need to frame a fresh aviation policy was articulated by Gujral during his visit to Nepal on June 6. He had then expressed his displeasure over the existing aviation policy pursued by Ibrahim.

Many believed Ibrahim -- who has opposed all attempts to allow foreign airlines to pick up a stake in domestic airlines -- would be moved out of the aviation ministry following the prime minister's statement.

But Ibrahim managed to hang on to the ministry, thanks to his proximity to former prime minister H D Deve Gowda. However, earlier this month, Gujral inducted Jayanti Natarajan as the minister of state for civil aviation which many say effectively clipped Ibrahim's wings in the ministry.

Sources said the TMC ministers have held a number of discussions with United Front coalition partners. Barring the Left parties, every party has agreed that foreign airlines should be allowed to hold an equity stake in domestic airlines which could be below 40 per cent.

The P V Narasimha Rao government had allowed foreign airlines up to 40 per cent in domestic airlines, but after Ibrahim assumed charge of the ministry last year the policy was scrapped. Ibrahim virtually banned foreign airlines and aviation companies from taking an equity stake in domestic airlines and airports.

"There will be a complete overhaul of Ibrahim's policy. We are on the verge of deciding what percentage of equity foreign airlines should be allowed to hold in domestic airlines,'' says a senior official working with Aviation Secretary M K Kaw.

He told Rediff On The NeT that Chidambaram and Natarajan have virtually decided to allow a 26 per cent foreign equity stake in domestic airlines. "This recommendation -- along with a series of other policy initiatives to completely overhaul the aviation industry -- will be submitted to the Cabinet soon," he added.

Many believe if the Gujral initiative becomes a reality, the first beneficiary of the policy will be the Tatas who have proposed an airline in association with Singapore Airlines. The Tata-SIA proposal, which became a subject of heated debate last year, was spiked by Ibrahim.

Insiders say the draft aviation policy may not be presented to Cabinet if Ibrahim disagrees with its tenor. Since he is the Cabinet minister, he alone has the authority to submit such a policy to Cabinet.

With the Left parties backing Ibrahim in his battle against foreign airlines and the Janata Dal in troubled waters, it is unlikely that Gujral will push ahead with the new policy without an all-party consensus on the issue.

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