The official, who asked not to be named, said: "It's because of administrative and priority reasons."

A senior Finance Ministry official told The Indian Express that the Rs 1,475 crore project is well within the existing guidelines of the Civil Aviation Ministry and must be cleared. "We're very worried because this is sending a very bad signal to investors, both in India as well as those overseas. The Indian investors are worried because this clearly shows how even the liberalised rules are being misinterpreted to suit certain interests," he said.

While the Aviation Ministry had got the FIPB to defer consideration of the project three times in the past, the project was slated to come up before a special sitting of the FIPB last Monday. The FIPB meeting, however, was put off followingthe reshuffle of various secretaries. It was pointed out that several of the new secretaries who were part of the FIPB obviously had no time to study the proposal.

The project was then slated to come up before the FIPB on Saturday. However, FIPB cleared 40-odd proposals involving a total foreign equity of Rs 500 crore on Saturday including a $ 200 million proposal by Tamil Nadu Industrial Development Corporation (TIDCO), Toyota Motor Corporation and Global Trust Bank.

TlDCO has been allowed to set up a $ 200 million hi-tech industrial park in the state. The park would be set up in a joint venture with two US-based companies -- Infac & Associates and Axes Tech.

The venture would concentrate on electronic and telecom component industries, consumer durable products, information technology, bio-technology and precision engineering. The foreign collaborators have developed similar parks in Malaysia and Thailand.

Toyota Motor Corporation is setting up an industrial township. The board also clearedapplications of Magnetti Marrelli, Boots-Nicholas Piramal pharmaceutical joint venture and Isvor Fiat India.

The FIPB has also allowed IFC Washington to increase its holding in Global Trust Bank to about 32 per cent from the present nine per cent. The board cleared the proposal pursuant to the Reserve Bank of India's nod on the application. The proposal had been pending with the FIPB for a long time as there was confusion on the actual level of foreign equity following the convertible debenture issue.

As per the application, IFC would increase its stake in Global Trust Bank to about 32 per cent, depending on the conversion rate of the debentures planned by the bank. Its holding of 9.62 per cent stake in the bank amounts to Rs 104 crore of the bank's equity capital. According to the proposal, Global Trust would be issuing about 25 lakh convertible debentures to IFC. The debentures will be priced at Rs 60 each and would be convertible after a period of four years.

The board has also given a go-ahead toHardy Oil and Gas of Britain to hike its stake in Hindustan Oil and Gas Exploration Company Limited (HOGECL) from the present 31.5 per cent to 41.5 per cent. HOGECL is a joint venture between Hardy Oil and Gas and Hindustan Petroleum. The British company is hiking its equity by infusing an additional Rs 8 crore into the joint venture. Besides, Unocal of US has also been allowed to be inducted as a new partner into the venture.

Further, the board has also granted approval to Siemens Power Engineering of Germany to set up a 100 per cent export oriented software development centre.

The centre would draw, design and plan setting up of power projects across the globe. The unit would come up in Gurgaon, Haryana, and all the exports would be made to the parent company in Germany. The company has set an export target of Rs 375 crore for the first five years.