Budget blues strike yet again

In spite of the booming growth in India’s aviation and tourism segments, the Union Finance Minister, P Chidambaram has left both these sectors highly disappointed with his Union Budget for 2008-09. The aviation and tourism industry, which is one of India’s biggest cash-cow, strongly feels that it has been given a step-motherly treatment. The Union Finance Ministry has not only failed to provide any incentives, but it also reduced the budget allocations for both, aviation and tourism. The Ministry of Civil Aviation (MoCA) has received only Rs 10,031 crore for coming financial year, compared to Rs 12,347 crore for 2007-08.
According to Saroj Dutta, Chief Financial Officer (CFO), Jet Airways, the aviation industry had two major demands – rationalisation of taxes on Aviation Turbine Fuel (ATF) and Fringe Benefit Tax (FBT) – but the budget did not address these demands.
“We were expecting that the budget would offer some tax incentives for developing Brownfield airports, which are very difficult to build compared to the Greenfield airports,” stated Sanjay Reddy, Managing Director, Mumbai International Airport Limited.
GoAir on its part was hoping that an exemption from payment of Withholding Tax on aircraft and engines earned by the foreign companies from an Indian company for lease agreements would be announced in the budget.
“The industry has been waiting with bated breath that this might just be the budget where these issues would have been addressed. But, a step-motherly treatment has been meted out to the aviation industry,” lamented Anand Ramachandran, Vice-President (Finance), Deccan.
01/03/08 Mayuresh Pawar/TravelBizMonitor

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Categories: Indian Aviation- In General Mar 2008