Forecast http://anoopastrosutra.com/2013/07/01/daily-forecast-india-july-1st-2013/, mentioned that government’s decision related to aviation may become an issue or scam.

Times of India has flashed a report related to Take Jet-Etihad deal, and this is related with the involvement of PMO.

Govt divided over Jet-Etihad deal, cab secy calls meet
Hindustan TimesBy HT Correspoxndent | Hindustan Times
India, July 2 — There is a deep divide within the government over the Rs. 2,058-crore Jet Airways-Etihad deal. To resolve this, cabinet secretary Ajit Seth will chair a meeting of secretaries on Tuesday to discuss the transaction following security-related objections raised by the prime minister’s office.

Abu Dhabi’s national carrier Etihad Airways had, on April 24, announced that it would purchase a 24% stake in Jet for Rs. 2,058 crore, a premium of more than 20% over the prevailing market price of Jet shares.

But on June 13, the foreign investment promotion board (FIPB) deferred a decision on approving the deal saying it needed more clarity on the ownership structure of Jet Airways as well the control that Etihad would exercise over the Indian carrier following the deal. Jet chairman Naresh Goyal owns a 51% stake in the airline.

In April, the deal was being seen as a sign of India’s attractiveness as an investment destination despite issues like rising inflation and current account deficit.

But the deal has been severely criticized by a parliamentary committee led by CPI(M) leader Sitaram Yechury as well as by several opposition leaders like Jaswant Singh of the BJP, Dinesh Trivedi of the Trinamool Congress and Subramanian Swamy of Janata Party.

The transaction had first raised eyebrows when, within hours of it being announced, India and UAE announced that they had agreed to increase the weekly flying rights between the two countries by nearly four times.

The two sides had agreed to allocate an additional 36,670 seats per week in addition to the existing entitlement of 13,600 seats per week. A bulk of these additional seats would go to Etihad and Jet.

Aviation minister Ajit Singh on Monday told HT that the bilateral deal between India and Abu Dhabi was “good for passengers and civil aviation in India”.

The Yechury-led committee had recommended that the bilateral agreement with Abu Dhabi “be reconsidered by the government to protect our national carrier and the airports of India”.

“The committee feels that the huge premium could be a backhanded way of obtaining access to the huge civil aviation market in India,” its report had said.

The Jet-Etihad deal can, potentially, feed the Abu Dhabi national carrier with hundreds of thousands of additional passengers on its routes to Europe, Africa and other cities of West Asia.

The Jet CEO Nikos Kardassis had resigned abruptly last month following the announcement of the deal with Etihad.

Published by HT Syndication with permission from Hindustan Times.