New Delhi: Civil Aviation Minister Hardeep Singh Puri on Thursday said that the government was open to the idea of 100% FDI in the airlines sector.
"We are in an expansionist mode. We want to turn Air India into a successful business, not just deal with the debt. Lessons are to be learnt," he said, adding that the "thinking caps were on".
The minister's statement comes a day after the government allowed 100 per cent foreign investment in coal mining and contract manufacturing, eased sourcing norms for single-brand retailers and approved 26 per cent overseas investment in digital media as it looks to boost economic growth from a five-year low.
On Friday, Finance minister Nirmala Sitharaman had announced tax incentives and some reforms for various sectors in an effort to stimulate slowing economic growth. After rapidly expanding in last couple of years, India's economic growth momentum has been slipping since the last 3-4 quarters. Not only did GDP growth fall to a 20-quarter low of 5.8 per cent in January-March, telltale signs of distress are visible in sectors like NBFCs, automobile, real estate, and FMCG.
To pull out the economy from the current slump, the finance minister provided tax relief for foreign portfolio investors (FPIs) and startups coupled with targeted steps for the automobile sector and upfront support of Rs 70,000 crore to public sector banks aim to revive demand conditions.
Union minister Piyush Goyal said decisions of the Cabinet on Wednesday are aimed to "liberalize and simplify the FDI policy to provide ease of doing business in the country, leading to larger FDI inflows and thereby contributing to the growth of investment, income and employment".
FDI is a major driver of economic growth and a source of non-debt finance for the economic development of the country. The government has put in place an investor-friendly policy on FDI, under which investment up to 100 per cent is permitted on the automatic route in most sectors/ activities.
These reforms have led to total FDI into India reaching USD 286 billion in five years from 2014-15 to 2018-19 as compared to USD 189 billion in the previous 5-years, he said. At USD 64.37 billion, FDI in 2018-19 is the highest ever investment received for any financial year.
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