| The department of industrial policy and promotion (DIPP) is miffed at the announcement made by Civil Aviation Minister Praful Patel to cap foreign direct investment for the privatisation of Delhi and Mumbai airports at 49 per cent.
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| DIPP sources said Commerce and Industry Minister Kamal Nath was of the opinion that the decision would require an approval from the Cabinet since it revoked an earlier policy announcement allowing 74 per cent FDI.
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| The sources also said the civil aviation ministry had gone beyond its mandate when it unilaterally announced the decision without consulting the DIPP, the nodal agency for all FDI policy measures.
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| Civil aviation ministry officials, however, told Business Standard that the decision to cap FDI at 49 per cent was “not a reversal of the earlier decision and therefore a Cabinet approval is not mandatory”. Officials added that a Cabinet approval would be sought if required, but ruled out a review.
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| The last date for submitting expressions of interest to participate in the modernisation of the airports was June 4, which has now been extended to July 20.
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| The sources said the announcement by Patel had also sent a wrong signal to foreign investors and the markets, which are already apprehensive about the United Progressive Alliance’s reforms agenda.
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| “It was not an investor-friendly measure and has sent out a wrong message to foreign investors,” an official in the department said.
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| Commerce Minister Kamal Nath, after taking charge of the ministry, said the government would use the FDI policy to promote exports and manufacturing and make India an attractive investment destination. |
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