Tuesday, September 10, 2019

Hisar-Chandigarh Shuttle Service: Khemka on subsidy to pvt airline — ‘like robbing 54 poor Peters to pay one rich Paul’

The subsidy provided by the government to private airlines operating flights under the Regional Connectivity Scheme (RCS) “is like playing Robin Hood in reverse” where several common men travelling by state transport end up paying taxes so that one rich person can enjoy the luxury of air service at a cheaper cost, a senior IAS officer is learnt to have said in a letter to the Haryana government.
A source in the state Civil Secretariat said the letter has been written by 1991-batch IAS officer Ashok Khemka, currently deputed as principal secretary in the science and technology department. Khemka, the source said, has questioned the Rs 3,500 per passenger subsidy being offered to a private airline that will operate on Hisar-Chandigarh route under the RCS.
Haryana Chief Minister Manohar Lal Khattar on September 3 flagged off the Hisar-Chandigarh flight service from the Hisar airport. Khattar said SpiceJet would initially provide daily service of two flights between Hisar and Chandigarh with the price fixed at Rs 1,674 per ticket. “Air travel is being started through a seven-seater airplane and 18-seater and larger airplanes would also be able to fly from the airport later,” Khattar had said.
The service under the RCS is heavily subsidised under UDAN (Ude Desh ka Aam Naagrik) scheme. Under the scheme, the Government of India offers Value Gap Funding (VGF) to subsidise the airfare and also grants concession on service tax on tickets. The state governments, under the scheme, must reduce the GST to 1 per cent or less for 10 years, and share 20 per cent of the Value Gap Funding. The scheme urges the state governments to provide additional concessions.
The source said that in his letter, Khemka has compared the taxes levied on the passengers of government buses with the subsidy being offered to those who take the flight aboard the 7-setare from either end. It was learnt that the senior officer has explained how an passenger who takes State Roadways bus pays a total of Rs 65 towards taxes, toll fee and VAT on diesel, in travelling from Hisar to Chandigarh or vice-versa, whereas a relatively rich flier will receive a subsidy of Rs 3,500 on the same route. “If the Roadways is offered subsidy and other concessions at par with those being given to the private airline, the fare payable on Hisar-Chandigarh route will come down to Rs 55-66 from from current Rs 240,” Khemka has reportedly written to the government.

As per calculation offered by Khemka in his letter, the source said, the subsidy of Rs 3,500 for one flier is equivalent to tax paid by 54 bus passengers. Khemka, according to the source, has written that “taxing 54 users of an ordinary bus to subsidise one rich flier is like robbing 54 poor Peters to pay one rich Paul. It is playing Robin Hood in reverse.”
10/09/19 Sukhbir Siwach/Indian Express
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