Monday, February 01, 2021

More airports to be run PPP way; tax break for aircraft leasing firms in GIFT city

New Delhi: Flying in and out of Varanasi, Bhubaneswar, Raipur, Indore, Amritsar and Trichy along with a number of small airports currently run by the Airports Authority of India (AAI) could soon be a better experience for passengers. Finance minister Nirmala Sitharaman in Monday’s Budget said more airports “will be monetised for operations and management concession,” including those in smaller cities — meaning they will be run PPP way. The FM has also proposed aircraft leasing companies setting up bases in Ahmedabad’s GIFT City will get a tax holiday on capital gains and tax exemption for aircraft lease rentals paid to foreign lessors.

A senior AAI official said the next lot of airports to be given for PPP operations are Varanasi, Bhubaneswar, Raipur, Indore, Amritsar and Trichy. “They will be given to PPP players by clubbing with smaller airports. Which means a corporate entity taking over one of these six airports will need to take small airport/s too. The (names and numbers of) smaller airports has not been finalised yet,” the official said. The government has in last two years completed the process of giving Jaipur, Guwahati, Thiruvananthapuram, Mangaluru, Lucknow and Ahmedabad to infra major Adani group.

The FM said the divestment of Air India and Pawan Hans Helicopters will be completed in the next fiscal. Air India Asset Holding Limited (AIAHL), to which AI debt has been transferred, has been allocated Rs 2,269 crore in FY 21-22 and the regional connectivity scheme has got Rs 600 crore. Public health units at ports of entry, including 32 airports, will be strengthened next fiscal as part of enhanced screening during the pandemic. In a first, Rs 1 crore has been allocated to room aero-sports like skydiving in India.

To make the International Financial Services Centre (IFSC) in Ahmedabad’s GIFT City a global financial hub, the FM has proposed to include tax holiday for capital gains or aircraft leasing companies based there and also give them tax exemption on aircraft lease rentals paid to foreign lessors. At present, all Indian airlines have leased aircraft from foreign countries like Ireland and Singapore and payments made in forex. Indian airlines have over 800 planes currently on order that are to be delivered in the next four to five years.

Remi Maillard, president and MD of Airbus India and South Asia, said the proposed tax exemption on aircraft leasing will “provide some relief to Indian carriers which are bleeding cash because of the Covid-19 pandemic... sits well with India’s desire to develop a local aircraft leasing and financing industry… (It) willl help grow the fleet size in India as a vast majority of these aircraft will likely be leased.”

01/02/21 Times of India

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