Last week, the Narendra Modi government came up with a Draft Civil Aviation Policy that proposes sweeping reforms. In the offing are a hike in FDI cap to more than 50 per cent, tax breaks for maintenance, repair and overhaul (MRO) services, and a review of the 5/20 rule that restricts domestic airliners from overseas expansion.
In an interview to Bloomberg TV India, Civil Aviation Minister Ashok Gajapathi Raju said the 5/20 rule is “retrograde” and needs to be scrapped. The Cabinet will review it in three weeks and the Aviation Policy will be given a final shape by December, he said.
There has been a lot of debate on the contentious 5/20 rule. The draft aviation policy also calls for a review. What’s your stance on that?
Generally speaking, the aviation policy will have to indicate the thinking of the government. So it has done that as far as totality is concerned and even 5/20 is part of it. Individually I am not for 5/20 because I find it a retrograde step. But it has come out of the Cabinet. The Cabinet at that time (UPA regime) decided that this rule should be there and to me it inhibits the Indian airline industry.
So the idea is that we should do away with it. But then the industry has found its level of comfort or discomfort over the years. So it gives them an opportunity to respond once more. Let’s see. I have to convince my colleagues in the Cabinet that this is a retrograde step.
And I think it’s a matter of time. That is my impression. But I could be wrong also.
So whatever it is, it has to be the policy of a government. It cannot be individual thinking. But as of today it is a thought that is again in the public domain and those who wish to respond can do it in whichever way they can.
02/11/15 Mahek Kasbekar/The Hindu Business Line
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In an interview to Bloomberg TV India, Civil Aviation Minister Ashok Gajapathi Raju said the 5/20 rule is “retrograde” and needs to be scrapped. The Cabinet will review it in three weeks and the Aviation Policy will be given a final shape by December, he said.
There has been a lot of debate on the contentious 5/20 rule. The draft aviation policy also calls for a review. What’s your stance on that?
Generally speaking, the aviation policy will have to indicate the thinking of the government. So it has done that as far as totality is concerned and even 5/20 is part of it. Individually I am not for 5/20 because I find it a retrograde step. But it has come out of the Cabinet. The Cabinet at that time (UPA regime) decided that this rule should be there and to me it inhibits the Indian airline industry.
So the idea is that we should do away with it. But then the industry has found its level of comfort or discomfort over the years. So it gives them an opportunity to respond once more. Let’s see. I have to convince my colleagues in the Cabinet that this is a retrograde step.
And I think it’s a matter of time. That is my impression. But I could be wrong also.
So whatever it is, it has to be the policy of a government. It cannot be individual thinking. But as of today it is a thought that is again in the public domain and those who wish to respond can do it in whichever way they can.
02/11/15 Mahek Kasbekar/The Hindu Business Line
