Special Correspondent

Allocation is meant for fleet acquisition

NEW DELHI: As the civil aviation sector expands at a rapid pace, the Union budget for 2007-08 has proposed a hefty increase in allocation for state-owned Indian and Air India and public sector undertakings such as the Airports Authority of India, Pawan Hans Helicopters and Air India Charters Limited.

In his budget speech, Finance Minister P. Chidambaram also proposed reduction in tax on aviation turbine fuel for all types of small aircraft and imposed a three per cent duty on private import of planes.

The total allocation for all public sector enterprises under the Civil Aviation Ministry is proposed to be increased from Rs. 2,256.36 crore to Rs. 12,192.09 crore with the lion's share earmarked for Indian, Air India and its low-cost subsidiary Air India Charters limited. The increased allocation is meant for the ongoing fleet acquisition plans of the two state-owned carriers.

While the allocation for Air India rose from the 2006-07 revised estimates of Rs. 490.84 crore to Rs. 6,337.01 crore, the allocation for Indian went up from Rs. 350 crore to Rs. 2,507.70 crore and that of Air India Charters took a jump of more than 10 times from Rs. 70.70 crore to 1,124.47 crore. Air India Charters operates the low-fare carrier Air India Express which operates flights to the Gulf region.

The outlay for Pawan Hans Helicopters Limited was proposed to be raised from Rs. 180 crore to Rs. 246.5 crore, while that of AAI from Rs. 1,149.82 crore to Rs. 1,961.41 crore. The regulatory body of the Directorate General of Civil Aviation (DGCA) also saw a massive hike in its outlay from Rs. 39.6 crore to Rs. 108.86 crore, while that of the Bureau of Civil Aviation Security was more than doubled from Rs. 7.08 crore to Rs. 18.43 crore.

Mr. Chidambaram also proposed to amend the Central Sales Tax Act to treat aviation turbine fuel (ATF) as a `declared good' for all small aircraft, with a maximum take-off mass of less than 40,000 kg, operated by scheduled carriers. This would imply a flat four per cent CST on ATF for these aircraft. Earlier, this facility was available only for turbo-prop aircraft. Now all small aircraft, including regional jets operated by scheduled airlines, would be covered by the provision.

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