BackCentre wants measures by state govts to improve air connectivity
The central government wants states to slash VAT on jet fuel, and to waive electricity and municipal charges for airport infrastructure for five years
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New Delhi: The Centre wants state governments to take financial measures such as slashing value-added tax (VAT) on jet fuel uplifted by airlines and underwriting of some seats to encourage aviation growth.
It also wants the state governments to waive electricity and municipal charges like house and property taxes for five years for airport infrastructure. The civil aviation ministry has also identified 87 regional “incentive destinations" and made it mandatory for scheduled airlines to mount capacity “which is at least equal to the capacity deployed on trunk routes" by October 2015.
Scheduled airlines would have to deploy at least 6% of their capacity on trunk routes on connecting these newly-identified destinations, such as within Jammu and Kashmir between Srinagar, Leh and Jammu.
A draft policy to promote regional and remote area connectivity says the development of airport in strategic and remote areas by the Airports Authority of India (AAI) would be guided by “the support provided by state governments".
In order to promote air connectivity across the country as a priority, the ministry has proposed a major shift in the route dispersal policy, promising airlines which fly to these regions exemption from various charges and other incentives.
The new policy aims to encourage airlines to operate to airports in remote and strategic areas where infrastructure has been developed for operations but have remained unserved or were under-served.
The government plans to offer the airlines concessions and incentives or provide viability gap funding for such operations, and to make it obligatory for the carriers to fly to such destinations.
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