E-visas, travel sops for high-flyers

The finance minister announced the development of new airports in Tier-I and -II cities but gave no relief to the aviation sector in terms of lower taxes on jet fuel

Finance Minister Arun Jaitley announced the introduction of electronic visas (e-visas), creation of heritage and religious theme-based tourism circuits and financial support for the development of a convention centre in Goa in his maiden Budget speech on Thursday. The government has also enhanced duty-free allowance for Indians returning from abroad to Rs 45,000 from Rs 35,000.

The minister announced the development of new airports in Tier-I and -II cities but gave no relief to the aviation sector in terms of lower taxes on jet fuel. Air India received an additional infusion of Rs 1,000 crore above the Rs 5,500 crore commited in the interim Budget in February.

The government said no custom duty will be payable on aircraft engines imported for repair and maintenance by airlines.

Jaitley said in his Budget speech, "Despite the increase in air connectivity, air travel is still out of reach of a large number of aspirational Indians. The scheme for the development of new airports in Tier-I and -II cities will be launched for implementation through the Airports Authority of India (AAI) or PPPs (public-private partnerships).”

The minister gave no details or a list of airports to be developed under the scheme. Last year the government had announced the development of 14 AAI-run airports through PPP. It started the process for Kolkata, Chennai, Ahmedabad, Jaipur, Lucknow and Guwahati. But the proposal got deferred.

Similarly, the AAI had marked 50 towns for airport development. These included towns with unused airstrips and those with potential for air traffic. Kapil Kaul of the Centre for Asia Pacific Aviation, said, "We will need more clarity from the civil aviation ministry on the airport development proposal. We were expecting recognition from the government that the sector is in trouble and the announcement of a few incentives. But that has not happened.''

The government announced the introduction of the e-visa facility at nine airports in six months. Other measures include the creation of five tourism circuits with Rs 500-crore Budget support, viability gap funding for a convention centre in Goa and service tax benefits to tour operators. "Services provided by Indian tour operators to foreign tourists in relation to a tour wholly conducted outside India is being taken out of the tax net,'' the minister said.

Travel agents also welcomed the steps for enhancing women safety. "This step will not only help the residents feel safer, but will also increase the security for solo women tourists, domestic and inbound,'' said Vikram Malhi, managing director (Asia) of travel portal Expedia.

"While the travel & tourism sector received both monetary and policy-level encouragement, we expected more in the civil aviation sector. Some rationalisation on tax on jet fuel, to bring it in line with international levels, would have resulted in  a level-playing field for Indian airlines,'' said Deep Kalra, founder and group chief executive of MakeMyTrip.

"The decision of introducing e-visa will provide the much-expected boost to the tourism sector in India. A strong focus on regional infrastructure and connectivity will also benefit in bringing in investments from foreign airlines as well for generating employment,'' said Ankur Bhatia, executive director, Bird Group.