No bailout packages for domestic airlines: MoCA

New Delhi: The Ministry of Civil Aviation (MoCA) has not asked for any bailout packages (financial packages) from Government of India (GoI) to assist players in the civil aviation sector, especially domestic airlines during their financial crisis. This was stated by Praful Patel, Minister for Civil Aviation while replying to the query raised by Rajyasabha MP, Shantaram Laxman Naik, seeking details regarding bailout packages.
However, GOI has constituted a committee, under the chairmanship of the Cabinet Secretary, which includes Finance Secretary; Secretary, Ministry of Civil Aviation; Secretary, Department of Revenue; Secretary, Ministry of Petroleum & Natural Gas; Secretary, Planning Commission; Dr. Deepak Parekh, Chairman, HDFC and Dr. Raghuram, Professor, IIM, Ahmedabad to study various issues relating to the current financial crisis faced by the domestic airlines.
The committee conducted two meetings recently. At the meeting, MoCA had proposed rationalisation of Sales Tax on Aviation Turbine Fuel (ATF), removal of Custom Duty on ATF, allowing private domestic airlines to operate on international routes and Foreign Direct Investment (FDI) in air transport sector. Patel further informed that GoI has taken various steps to help the domestic aviation industry. The major steps are: abolition of Custom Duty on importing ATF; reduction of ATF prices and extension of credit period by oil companies.
Interestingly, the Government is all set to provide second stimulus package to India Inc. at the start of the New Year to tide over the financial crisis. As per sources the Government is not going to announce such financial sops on a regular basis and the second round of packages may be the last financial sop from GOI to push Indian companies.
29/12/08 Anish V Punnackattu/TravelBizMonitor

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Categories: Indian Aviation- In General Dec 2008