On the face of it, there is nothing new in what Union minister for civil aviation Suresh Prabhu has said about India's plan to build 100 airports over the next 15 years or so at a cost of about Rs 420,000 crore — but perhaps the timing should make us and the government think about whether there should be a mindless splurging on airports at the taxpayer's expense in an industry where vulnerabilities loom alongside major opportunities.
The aviation policy of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government laid out in 2016 makes regional air connectivity a priority in an attempt to create airstrips where none exist. This is perhaps natural in a major economy of subcontinental dimensions. But it is equally important to ask some questions that deserve more than simplistic answers. Where is the money going to come from? How does that fit into overall fiscal priorities? What does this mean for the banking sector?
On the face of it, India is the world's fastest-growing aviation market that has clocked double-digit growth over the past four years, and the noble idea of putting remote towns on the aviation map strengthens the case for a slew of new airports. However, there are other factors that must make us go about it cautiously. The national air carrier, Air India, continues to be a white elephant, albeit a flying one.
While the aviation ministry is fending off fears that its debt-pile may turn into a bad loan, both Air India and the country's leading full-service airline, Jet Airways, lead the industry pack in losses estimated at around $1.9 billion (about Rs 13,300 crore) in the current fiscal year. Amid rising oil prices and a fresh strain on the fiscal deficit, caution in spending is a good idea.
05/09/18 Madhavan Narayanan/moneycontrol
To Read the News in full at Source, Click the Headline
The aviation policy of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government laid out in 2016 makes regional air connectivity a priority in an attempt to create airstrips where none exist. This is perhaps natural in a major economy of subcontinental dimensions. But it is equally important to ask some questions that deserve more than simplistic answers. Where is the money going to come from? How does that fit into overall fiscal priorities? What does this mean for the banking sector?
On the face of it, India is the world's fastest-growing aviation market that has clocked double-digit growth over the past four years, and the noble idea of putting remote towns on the aviation map strengthens the case for a slew of new airports. However, there are other factors that must make us go about it cautiously. The national air carrier, Air India, continues to be a white elephant, albeit a flying one.
While the aviation ministry is fending off fears that its debt-pile may turn into a bad loan, both Air India and the country's leading full-service airline, Jet Airways, lead the industry pack in losses estimated at around $1.9 billion (about Rs 13,300 crore) in the current fiscal year. Amid rising oil prices and a fresh strain on the fiscal deficit, caution in spending is a good idea.
05/09/18 Madhavan Narayanan/moneycontrol
0 comments:
Post a Comment