Minister favours doing away with 10 per cent service tax on air travel
The second edition of India Aviation-2010 began at the Begumpet Airport here on Wednesday with Civil Aviation Minister Praful Patel expressing optimism that the Indian civil aviation sector would see recovery by early 2011 if the current growth trend continued.
He termed the accident during the aerobatics display as an unfortunate incident.
Inaugurating the five-day event and later addressing the media, Mr. Patel said trends in the last quarter of 2009 and early 2010 indicated that the worst in the sector may be over. He said de-regulation had brought in more competition, efficiencies, better fares and more players into the arena. The second edition of the event saw a higher level of participation than the previous one despite the troubled times for the sector globally, he noted.
Mr. Patel said he would request the Finance Ministry to consider doing away with the proposal to levy 10 per cent service tax on air travel.
Replying to a question, he ruled out infusing any more capital into Air India. The government could not keep endlessly supporting the national carrier. It would insist on the airline undertaking to go for cost-cutting measures and tightening the belt. Apart from Rs.800 crore equity infusion, another Rs.1,200 crore was committed for the current financial year.
No decision had been taken on allowing foreign direct investment in the sector, but and it was under consideration.
To a question on safety, he said the government was doing its best to make sure that Indian skies were secure; adequate measures were in place. He said helicopter, general aviation, cargo and allied services have great opportunities ahead. There are 90 operational airports; India needs 400 more. About 500 more helicopters and another 200 to 300 aircraft were needed.
Chief Minister K. Rosaiah said commercial production at a joint venture set up by Tata Advanced Systems with Sikorsky Aircraft Corporation, U.S. at the Areospace special economic zone near the Rajiv Gandhi International Airport for a cabin manufacturing facility would start next month. The first commercial helicopter would be ready by November 2010.
Stating that his government had come up with attractive fiscal and non-fiscal incentives for the private sector in the airport segment, he said airports had been proposed at Kurnool, Tadepalligudem, Nizamabad and other towns in public-private partnership mode in a phased manner.
French Ambassador to India Jerome Bonnafont referred to the huge potential of the Indian civil aviation sector. France wants to be a partner in the development of the sector. India and France have a lot of opportunities in public private partnerships in safety, training, maintenance and industrial production. France is ‘partner country' at the event.
U.S. Ambassador to India Timothy J. Roemer said India was expected to emerge as the world's fastest growing aviation market over the next two decades. Billions of dollars worth of infrastructure investments were planned to handle an estimated 580 million passengers in the next five to seven years. Opportunities to work together abound.