NEW DELHI (NNN-Xinhua) -- The Indian government has decided to allow foreign direct investment (FDI) in aviation sector, permitting overseas carriers to buy up to 49 percent stake in its domestic airlines, local media reported Wednesday.
"The question was to allow foreign airlines to participate in foreign direct investment. I discussed it with the finance minister (Pranab Mukherjee) and he has agreed. We will bring out a note for the cabinet (to approve) now," Indian Aviation Minister Ajit Singh told the media Tuesday.
"We all know that the aviation industry is under a lot of stress. 49 percent FDI is already there. The question was to allow (international) airlines to participate in the FDI. The CoS (Committee of Secretaries) has also recommended that FDI limit should be raised to 49 percent," he said.
The aviation minister also held a meeting Tuesday with the finance minister and announced that the government would release 1. 50 billion rupees (30 million U.S. dollars) for payment of pending salaries as well as allowances of employees of its national carrier Air India
"The government has decided to release sufficient funds to pay at least some part of their wages and productivity-linked incentives," Singh said.
The Indian government's latest move to allow 49 percent FDI came nearly two months after Prime Minister Manmohan Singh said the government would find "ways and means" to help ailing private carrier Kingfisher Airlines.
Kingfisher Airlines, a venture of liquor baron Vijay Mallya, announced some months ago that it suffered significant losses and shut down its budget carrier Kingfisher Red. -- NNN-XINHUA
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