Decision soon on allowing investment by foreign airlines: Zaidi

The Civil Aviation Ministry is considering a suggestion from the Department of Industrial Policy and Promotion (DIPP) to allow investments by foreign airlines in the Indian aviation sector.

"We have received a proposal from DIPP on the inflow of investments by foreign airlines in Indian carriers. It is under consideration and a decision in this regard would be taken soon," Civil Aviation Secretary S N A Zaidi said at the "India Aviation Meet" organised by CII here today.

At present, no foreign carrier is allowed to pick up stake in their Indian counterparts, as is the case in several countries including the US.

Speaking on the concerns raised by the aviation sector on the budget proposal to hike service tax on air travel, Zaidi said his Ministry would take up the issue with the Finance Ministry.

He said Indian airlines have also approached the ministry on the issue of high taxes on aviation turbine fuel (ATF).

The Federation of Indian Airlines (FIA), an umbrella body of Indian carriers, has demanded that ATF be brought under the ambit of the Goods and Service Tax (GST) so that a uniform tax rate of four per cent is imposed on it across the country.

Stressing the need for strong policy framework to make aviation sector more safer, Zaidi said, "It is high time that an overall regulatory framework be further strengthened, as the passenger traffic is expected to cross 180 million by 2015 and 300 million by 2020."

He said the process of gradually transforming the Directorate General of Civil Aviation into a full fledged Civil Aviation Authority (CAA) with adequate administrative and financial powers had been launched, he added.

Elaborating on the overall contribution of the civil aviation to the GDP, he said the Ministry would also launch a satellite accounting system to assess the actual contribution of the sector to the country's economy.

He stressed that public private partnership model in development of aviation infrastructure has been a success and 35 airports were being developed by Airports Authority of India in non-metro airports.

Zaidi also said that there was need to increase the connectivity to Tier-II and III cities in the country.