Thursday, July 21, 2016

Regional connectivity: Uttar Pradesh has own air plan, offers tax sops for intra-state airlines

New Delhi: Even as the Centre is working on the fine print of its proposed regional connectivity scheme with subsidised airfare of Rs 2,500 per ticket per hour, the Uttar Pradesh government has come up with a similar proposal, inviting proposals from air service operators for intra-state connectivity to five cities — Agra, Varanasi, Gorakhpur, Lucknow and Allahabad.
Under the UP government scheme, which seems to draw inspiration from the Centre’s regional connectivity plan, the state will provide fiscal incentives to operators, including viability gap funding (VGF), lower value added tax at 4 per cent on aviation turbine fuel as against 21 per cent, and no landing or parking charges. These concessions will only be available for airlines operating within the state. On July 6, the state government invited proposals, through the UP State Tourism Development Corporation Ltd (UPSTDC), from scheduled and non-scheduled airline operators using 18-20 seater passenger aircraft.
“The state government will bear all the costs for intra-state connectivity. Air operators who bid the lowest in terms of per hour of subsidy, and satisfy technical and financial parameters, will get permission to fly. The ticketing will be done by the state,” said Avinash Chandra Misra, Joint Director, Travel Trade, Uttar Pradesh Tourism. He said more cities could be added after a year.
21/07/16 Sunny Verma/Indian Express
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