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Cabinet clears 100% FDI in aviation under automatic route

 

Cabinet clears 100% FDI in aviation under automatic route. Huge Demand for AME's in the years to come.

As our new blog is up, a good or you may say very good news is up here.  It would be a pleasurable experience to get to hear that now 100% FDI is allowed in the aviation sector by the cabinet. Yes, for all the aspiring AME’s this step could result into a big boon as this foreign direct investment is directly proportional to the advancement in the whole lot of aviation industry.

When the major step has been taken?

The Union Cabinet meeting, headed by Prime Minister Narendra Modi ended up giving major decision in the country’s support by allowing 100% FDI or foreign direct Investment into Indian online operators under the automatic route. This major step has been taken with the initiation of 49% investment under approval route in Air India.

“Foreign airlines allowed to invest up to 49 percent under approval route in Air India,” the statement said.

Being simple with words, let’s explain what the policy says. As per the policy, the foreign airlines are allowed to invest under government approval route in Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49 percent of their paid-up capital.

Earlier the provision was not applicable to Air India, which implied that the foreign airlines could not invest in Air India. “It has now been decided to do away with this restriction and allow foreign airlines to invest up to 49 percent under approval route in Air India,” it added. This condition was bind up with certain conditions as well. The statement said that foreign investment in Air India including that of foreign Airline (s) shall not exceed 49 percent either directly or indirectly and “substantial ownership and effective control of Air India shall continue to be vested in Indian National.” 

Also, cabinet approved 100% FDI in construction sector under automatic route after giving a thorough look into the FDI or foreign direct investment policy in certain sectors.

 Significance of Transport, tourism and cultural committee in bringing Aviation sector forward.

Transport, tourism and culture committee sat on a parliamentary panel and recommended that the national carrier Air Indian should be given at least five years to revive and write-off its debt.  The parliamentary panel standing committee on Transport, Tourism and Culture ended up with the conclusion of the need of the government to review its decision to privatise or disinvest Air India and explore the possibility of “an alternative to disinvestment of our national carrier which is our national pride.”

 The draft report said, “Air India should be given a chance for at least five years to revive themselves”. The tenure of five years indicates the end of the turnaround plan and FRP period in 2022. It said the airline’s debt was “due to policy directions of the ministry of civil aviation. Air India may be permitted to function as a government PSU with less government control”. The committee also expressed apprehension that Air India’s strategic disinvestment “would result in job loss of many people” and asked the government to “make an assessment” of the job loss before deciding on stake sale.

While efforts have been made to revive the airline in the past, Air India has not reported a profit in at least a decade; in 2015-16 it posted an operating profit of Rs 105 crore and reduced its net loss to Rs 3,837 crore compared with Rs 5,859 crore in 2014-15. Retaining the airline in its fold is a much more expensive proposition for the government than transferring the ownership. The government would require infusing amounts much higher than the Rs 50,000 crore proposed under a revival plan for AI, which entails it to continue as a state-run entity. The Centre has already infused about Rs 30,000 crore in the airline over the past few years.

 Conclusion

Hence, it would be really exciting to see what advancements are waiting down the lane in the most popular and highly economical zone that is aviation sector. The push on is needed when an industry is required to grow. A step towards growth of one sector of a country can help the whole country to grow and top in the economic scale in the world.

This advancement is brought forward by the top AME College in India, Bharat institute of technology (BIA). The training of an AME is not just a task but a responsibility and the top AME college of India knows that. We push our all efforts toward making you and your career excel. Shine bright with BIA or Bharat Institute of aeronautics, the top AME College in India.

Also, all AME aspirants will get more and more opportunities that may give them immense chances to build themselves both academically as well as technically after doing AME course. This growth will ultimately provide them economic power too. Cheers to the coming bright days of aviation, cheers to the immense productive day and cheers to the future glorifying economy of India.

 


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Bharat Institute of Aeronautics (BIA), Patna is one of the primary Institutions to promote Aviation Awareness amongst the new aspirants and move forward towards progressive development, with changing time and technology.

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