Centre says state govts should rework tax structure on jet fuel

The Centre has urged all state governments to rework the tax structure on jet fuel in the interest of the aviation industry and has received "positive" response from some states.

"We have written to all state governments. The states where aviation activity is low, they responded positively because they wanted more activity. And where there is more activity by Indian standards, they (those states) are dragging their feet. So that is clearly visible," he told reporters here today.

Raju had earlier written a letter to all state governments for reworking of the tax structure on the aviation turbine fuel (ATF) which constitutes almost 45% of an airline's total costs.

The minister was speaking to reporters on the sidelines of a programme organised by the Aeronautical Society of India's Hyderabad chapter where he was the chief guest.

When his attention was drawn to the progress on the issue of privatisation of six major airports that was initiated about three years ago but stalled due to Lok Sabha polls, he counter-posed, "Three years back? That's why it is news to me."

The airports which were planned for development through the public-private partnership (PPP) mode on 30-year lease are in Kolkata, Chennai, Ahmedabad, Guwahati, Lucknow and Jaipur.

The Civil Aviation Ministry has sought fresh consultations with state and central government organisations, airport and airline operators, passenger associations and travel operators before finalising the model concession agreement (MCA) for the construction and operations of airports in the country on the PPP mode.

To a question on Air India, Raju said there were clear turnaround plans in place and it was up to the ailing carrier to perform.

He also said the government was mulling evolving a new aviation policy which would enable the sector to grow to its potential and contribute to the economy.