The Tata SIA Airlines Ltd’s research report on the contribution of aviation to the Indian economy makes lofty projections about the sector: It believes civil aviation in India has the potential to create an economic value of $250 billion and contribute to around 5 percent of the country’s GDP over the next 10 years. The report also foresees a three-fold rise in domestic air traffic by 2025.
There is a yawning gap between the projections and the ground realities (the sector is valued at $16 billion as of FY2015), but if the latest National Civil Aviation Policy (NCAP) draft is anything to go by, the government seems to be pulling its socks up to bridge it.
The draft policy, which was recently placed in the public domain to invite feedback from the stakeholders, lays emphasis on 16 critical areas of the civil aviation industry ranging from safety to regional connectivity, bilateral traffic rights, maintenance, repair and overhaul operations, fiscal support and air navigation services, among others.
Says Jitender Bhargava, former executive director of state-run Air India, “It is the best draft policy in the last 20 years. It is streets ahead of others [six other civil aviation policies drafted by past governments], touching all aspects of aviation.”
Phee Teik Yeoh, CEO, Vistara—Tata SIA Airlines Limited, agrees: “It is a fairly comprehensive approach that will help unleash the potential of the aviation sector in India.”
For the first time, the policy talks of concessions for airlines to fuel growth. Some of the fiscal concessions include service tax and customs duty exemptions for various sub-sectors of the aviation industry, and exemption from paying various airport-related charges.
08/12/15 Anshul Dhamija/Forbes India
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There is a yawning gap between the projections and the ground realities (the sector is valued at $16 billion as of FY2015), but if the latest National Civil Aviation Policy (NCAP) draft is anything to go by, the government seems to be pulling its socks up to bridge it.
The draft policy, which was recently placed in the public domain to invite feedback from the stakeholders, lays emphasis on 16 critical areas of the civil aviation industry ranging from safety to regional connectivity, bilateral traffic rights, maintenance, repair and overhaul operations, fiscal support and air navigation services, among others.
Says Jitender Bhargava, former executive director of state-run Air India, “It is the best draft policy in the last 20 years. It is streets ahead of others [six other civil aviation policies drafted by past governments], touching all aspects of aviation.”
Phee Teik Yeoh, CEO, Vistara—Tata SIA Airlines Limited, agrees: “It is a fairly comprehensive approach that will help unleash the potential of the aviation sector in India.”
For the first time, the policy talks of concessions for airlines to fuel growth. Some of the fiscal concessions include service tax and customs duty exemptions for various sub-sectors of the aviation industry, and exemption from paying various airport-related charges.
08/12/15 Anshul Dhamija/Forbes India
