CCI sees red over sops for AI-Indian marriage

New Delhi: The Competition Commission of India (CCI) has called for parity in the M&A conditions for public and private sector companies, in a recent policy document submitted to the Planning Commission.
According to the commission, PSUs should not be given any special fiscal or other benefits that are denied to private companies. The Plan panel is considering the competition principles proposed by the CCI to be incorporated in the 11th Plan.
In the recent merger of national carriers Air India and Indian, the government has provided income tax benefits worth about Rs 256 crore as well as stamp duty waiver. The CCI, in its draft report on a national competition policy submitted to the Planning Commission, has suggested ‘competition neutrality’ with respect to merger of government or private companies.
In the case of Air India and Indian, the finance ministry has allowed the carriers to carry forward unabsorbed depreciation and losses to be set off against future profits. The ministry has already proposed an amendment to Section 72A of the Income Tax Act to enable these benefits to the two airlines. This would result in tax concessions close to Rs 256 crore.
Once the new norms suggested by the CCI are in place, the disparity may end.
09/04/07 Suny Verma/Economic Times

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Categories: Air India Apr 2007, General Aviation Apr 2007, Indian Apr 2007