MoCA moves aviation policy for inter-ministerial consultations

After months of discussions with various stakeholders, the Ministry of Civil Aviation has put up the revised draft aviation policy for inter-ministerial consultations.
The development is a step forward in finalising the new civil aviation policy, whose draft was unveiled by the Ministry back in October 2015.
To tap the high growth potential of the country's aviation space, the proposed policy has suggested a slew of measures including strengthening regional connectivity and tax incentives for airlines.
A senior official said the Ministry moved the draft Cabinet note on new civil aviation policy for inter-ministerial consultations last Friday.
Without providing any specific details, the official said comments on the policy are expected from various ministries, including Defence and Home, in a couple of weeks. After receiving the responses, the Ministry would move the Cabinet for final approval, he said.

Since coming out with the draft policy in October last year, the Ministry has held extensive consultations with various stakeholders including ministries, airlines, airport operators and ground handling agencies.

On April 1, Civil Aviation Secretary R N Choubey said a degree of "consensus" among various stakeholders on issues in the draft policy has "emerged". He had also said that the policy is likely to be approved by the Cabinet this month.
Initially, the policy was expected to be finalised in the last financial year as certain proposals were to be implemented from April 1, 2016.
However, differences over various issues including the 5/20 rule for domestic carriers, have delayed finalisation of the policy.

The issue of 5/20 international flying norm has witnessed extensive debates with legacy carriers opposing any changes to the rule, while start-up airlines are against continuing with the requirement.
Under 5/20 rule, carriers having five years of operational experience and a fleet of at least 20 planes, would be allowed to fly overseas.
Measures suggested in the draft policy seek to give a boost to the Indian aviation sector, which has a high growth potential, and strengthen regional connectivity.
It has suggested tax incentives for airlines, maintenance and repair works of aircraft besides mooting 2 per cent levy on all air tickets to fund regional connectivity scheme.

There are other significant proposals such as increasing FDI limit for foreign airlines, setting up of no-frills airports and providing viability gap funding for airlines to bolster regional air connectivity.