Civil aviation minister Praful Patel is clear that the government can do very little at this point in time to bail out the loss-laden airline industry. In an exclusive interview to ET Now's Rohini Singhand Faizan Khan on his return to the Capital, Mr Patel emphasised that the decision of some airlines to suspend operations for a day was not correct and officials of the civil aviation ministry would meet representatives of the industry to discuss the contentious issues. Excerpts:
Does the government have a plan to help the airline industry reduce costs?
I do understand that the industry in India is going through a bad phase and I do sympathise on certain counts, but it is not an issue to do with the government alone. First and foremost, the Centre levies no taxes at all. And, therefore, it takes nothing from the airline industry. The issue of ATF is a sales tax issue with the states and I have been talking for years with the state governments.
I had even held a conference of state finance ministers to discuss ATF issues. Unfortunately, except Andhra Pradesh not many states have seen reason. The issue was also raised before the prime minister. Last year, I took the aviation industry with me to apprise him of the problems. The ATF issue was further compounded by the oil price rise of 2008-09 .
Therefore, we do understand that this is a problem for the whole sector. But on the other hand if one's talking about what the government can do, there's very little I can do because, as I said, we don't take taxes from the aviation sector. So, from where is the question of giving back?
Are you then going to push for the finance ministry to have ATF given declared goods status?
Well, we tried it last year when the oil prices had reached the $140 a barrel mark. And there was a sympathetic consideration, but at the end of the day it was decided that you can't take away the states' revenue without their concurrence. That isn't happening. I've spoken to the state empowered committee consisting of the finance ministers of states. They haven't taken a call.
I can't set a deadline and I can't give an answer on what the states collectively would like to do on this call. The other issue is about airport charges. I don't think these charges are phenomenally high. What are you comparing with? Which country are you comparing with? If you look at the overall world statistics, in some places, the charges are higher than us and in some places the charges are lower than us. If you draw a mean, it is quite okay.
If you look at India, we have 70 plus airports in this country which do not make a single rupee, yet the government has a responsibility to keep them functioning. Some airports have one flight a day, some have no flights at all. And yet they are operating airports. So, one must understand that you can't say that whatever the cost in Mumbai, Delhi, Calcutta, Chennai will be just the cost incurred by the government.
04/8/09 Rohini Singhand Faizan Khan/Economic Times
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Tuesday, August 04, 2009
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'We don't take, so where's the question of giving back
Tuesday, August 04, 2009
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