Every
day, after I have my dinner, I spend some time browsing the news
channels on TV. Last week, as I was making my round of the channels,
I saw Mr. Ajit Singh, India's minister of aviation, making a
statement about a proposed joint venture by India's TATA conglomerate
with a Malaysian low cost airline 'AirAsia.' I knew how TATA group
had failed in all their previous attempts to get into aviation
business, even when they had proposed a joint venture with Singapore
Airlines. In fact ex-chairman of the TATA group went on record that
they failed to get in because of the corruption issues.
Given
this past history, it was not expected that the venture would be
given a green light by the Delhi Mandarins. True to my expectations,
I found, Civil Aviation Minister Ajit Singh, expressing
reservations about the proposal, saying that the current policy,
which allows a foreign airline to invest only in an existing carrier
and not a new greenfield one, needed to be clarified, even though he
and his ministry are not opposed to the Tata-AirAsia venture. I knew
that the proposal was doomed; like past attempts by TATA's, for sure.
However,
I was really surprised to see a news item appearing in news papers
two days later, that said that the Rs80-crore (800 Million Ruees)
venture between AirAsia, Tata Sons and Telstra Tradeplace has been
cleared by Foreign investment promotion board (FIPB). The news item
specifically referred to Arvind Mayaram, secretary, Department or
Economic Affairs in the finance ministry, who had said; "It's
been cleared. They will have to take the necessary licences from
aviation regulator DGCA and can start operating once they get the
licence." Next night, I again saw honourable minister for civil
aviation, Mr. Ajit Singh on TV announcing the approval of Air Asia
venture and he welcomed it.
This
was really funny. With TATA group, openly proclaiming its staunch
opposition to any unfair means or shady operations, such
possibilities were totally ruled out. Then what could have happened
that made the civil aviation minister eat his words.
The
Economic Times broke the story on 15th
March 2013, that gave real reason for this sudden reversal of the
decision by civil aviation ministry. According to this report, a
humble punctuation mark saved the joint venture, with India’s
foreign investment regulator interpreting a 2012 ministry press note
to mean foreign investments were also allowed in newly created
airlines.
This
press note says;
"The
government of India has reviewed the position in this regard and
decided to permit foreign airlines also to invest, in the capital of
Indian companies,
operating scheduled and non-scheduled air transport services, up to
the limit of 49% of their paid-up capital,"
Note
the comma, that appears after the word companies in this note. In the
FIPB meeting on 15th
March 2013 officials of the finance ministry and Department of
Industrial Policy and Promotion (DIPP) asserted that this Press Note
allows investment in new greenfield companies, against the contrary
stand of aviation ministry officials, who argued that current policy
allows a foreign airline to invest only in an existing carrier. If
this comma had not been there after the word 'companies', the policy
would have meant that foreign airlines were permitted to invest only
in Indian companies already operating air transport services and TATA
-Air Asia proposal would have never seen green light..
Aviation
ministry officials are still sour with the decision. An official said
that "They (AirAsia) still have to come to the aviation
department to get air operating permit or bring aircraft into this
country." Other airlines are also not too happy with increased
competition. However, if we consider the vacuum created by the exit
of Kingfisher airlines in the airlines space, arrival of a new
entrant is not a bad idea at all.
This
is the power of a humble punctuation mark. We go on using comma's
without much thinking, rather freely I think! But Comma's can make
all the difference to a major deal.
18
March 2013
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