Union Civil Aviation Minister Jyotiraditya Scindia on Tuesday urged West Bengal, Delhi and Punjab among eight states to reduce VAT on Air Turbine Fuel (ATF) for facilitating air connectivity to Tier-II, Tier-III cities.
The Minister made the request to Assam, Maharashtra, West Bengal, Delhi, Tamil Nadu, Rajasthan, Bihar, and Punjab governments to reduce VAT on ATF for the growth of civil aviation sector in their states.
Scindia promised to increase aeroplane connectivity in these eight states if they reduce VAT on ATF.
"I urge you (eight states) politely to reduce VAT on ATF. I promise you to increase the aeroplane connectivity in your states," Scindia said while speaking at the concluding session of a two-day conference of Ministers of Civil Aviation of all states and Union Territories here in the national capital.
The Minister said there were 12 states who had far-sighted views on this issue and they had lowered VAT on ATF many many months ago. "Therefore they had increased travel to their states because aeroplanes will go where raw materials are cheap. And ATF constitutes between 45-50 per cent of the total cost of the airline sector."
"The ATF of these 12 states was 1-4 per cent, and the ATF of 26 states was 20-30 per cent. In the last one-and-a-half year, the graph of the ATF has increased from Rs 53,000 per km to Rs 1.40 lakh per km. In the last few months, there is a reduction in ATF of almost 20 per cent but the most cost-affecting part of the airline sector is still ATF," Scindia said.
Scindia extended special thanks to Andaman and Nicobar Islands, Mizoram, Tripura, Haryana, Manipur, Arunachal Pradesh, Uttar Pradesh, Ladakh, Jammu and Kashmir, Uttarakhand, Himachal Pradesh, Dadar and Naga Haveli and Daman and Diu, Madhya Pradesh, Jharkhand, Gujarat and Karnataka for reducing VAT on ATF on the request of Civil Aviation Ministry.
"So, 28 states are between 1-4 per cent of VAT on ATF. Now, there are only eight states where these is 20-30 per cent VAT. Thus, my first request in the Civil Aviation Minister's conference is to those eight states to kindly bring down your barriers to entry. Only when you bring down your barriers to entry, will you proliferate civil aviation activities in your state. This will enhance civil aviation sector's improvement when you all these eight states reduce VAT of ATF."
The Minister also announced that the new growth in civil aviation sector is going to come from Tier-II, Tier-III cities for which the consistent effort of this government is to concentrate on the development of airport infrastructure in smaller cities.
The Minister made the announcement while noting that the growth rate in Tier-II and Tier-III cities increased to 21 per cent between 2015 and 2020 which was 10 per cent between 2010 and 2015.
"... It is estimated that the new growth is going to come from Tier-II and Tier-III cities," said the Minister.
Pointing to Prime Minister Narendra Modi's vision to "democratise" the civil aviation sector, Scindia said the civil aviation sector is not meant for a chosen field, it must be for the comman man.
"So, the consistent effort of this government is to concentrate on the development of airport infrastructure in smaller cities which will be the new growth area in the days to come," said the Minister.
Explaining 'UDAN' scheme, a regional airport development program of the Government of India and part of the Regional Connectivity Scheme of upgrading under-serviced air routes to make air travel affordable and improve economic development in India, Scindia said, "We built 70 new airports in last six years under UDAN scheme. Nearly 2.10 lakh flights could manage to fly under UDAN scheme, and nealy 1.10 crore passengers could travel under the scheme. These 1.10 crore people were among those who had never imagined of travelling through air."
As far as connectivity is concerned, Scindia said, "We have been able to connect "multiple new centres and states".
The Minister also mentioned how civil aviation has beeen mostly affected sector during the Covid-19 pandemic.
Considering multiple problems being faced by passengers across the world due to late running of planes, long queues on airports and issues of missing baggage, Scindia said "I am happy that India cooperating seamlessly".
"Pre-Covid, India's record was nearly 4 lakh passengers per day. We broke that record two times-- in April this year and another a few days ago. We have achieved a new record this time between 4.07 lakh to 4.1 lakh travellers per day," Scindia said while speaking at the concluding event of a two-day conference of Ministers of Civil Aviation of all states and Union Territories.
"It is a new record that India has set during the post-Covid scenario," he added.
( With inputs from ANI )
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