‘Time to put in place a wider ecosystem for aviation’
Premium- Govt is looking at expanding network of FTOs to back the requirement of human resource
NEW DELHI : With India’s airport infrastructure and airlines now well in place, it is time for a wider focus on the sector, said civil aviation minister Jyotiraditya Scindia. According to him, a broader ecosystem of civil aviation needs to set up in the country, including cargo, drones, flight training schools and maintenance, repair and overhaul (MRO) facilities.
During his virtual address at the Mint Mobility Conclave on 28 July, the minister said that it is important to look at the civil aviation sector in entirety in addition to the conventional focus areas of airports and airlines.
“Too much preponderance has always traditionally been on airlines and airports and rightfully so, because they are the linchpins of the ecosystem of civil aviation. But now that these linchpins or these bulwarks have come into place in a very formidable manner in our country, it’s important also now very much like the auto sector to set in place the ecosystem of civil aviation and that ecosystem comprises of multiple myriad areas within civil aviation," he said, citing cargo, drones, flying training organizations, ground handling among some of the key areas of the ecosystem.
Noting that cargo was one of the few operational segments in aviation during the initial phase of the pandemic and lockdowns globally, Scindia said during the pandemic, India’s share in international cargo traffic has risen from 2% to 19%. He described air cargo as a sunrise sector and said that transportation of perishable goods too has gained momentum under the government’s ‘Krishi Udan 2.0’ initiative.
The minister also said that the Centre is looking at expanding the network of flying training organizations (FTOs) to back the requirement of human resource in the growing aviation industry. Currently, India has 34 such centres and the plan is to grow the figure to 50 by the end of next year.
On the policy focus for drones, Scindia outlined the drone policy and the production-linked incentive scheme for local manufacturing of drones as major steps to boost the sector. He said that drones will provide “a huge opportunity within India for value creation" both in the services and manufacturing sectors.
MROs, he said, would be a major focus area and investments such as the recently-announced $150 million by French aerospace major Safran to set up aero engine MRO facility in Hyderabad would boost the sector. The investment would generate around 1,000 jobs, he said.
Observing the growth of air traffic in tier-II and tier-III cities, Scindia exuded confidence that air transport will become the largest mode of mass transport for most Indians in the future, driven by travellers from smaller cities.
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“This sector is poised for growth. This sector is poised to attain new heights and I am very confident that in the days to come, civil aviation will become the mainstay of transportation in India."
Mobility in India is an idea whose time has come, Scindia said. “Though it was a sector in its infancy in earlier days, we are now going through a very major growth phase in civil aviation in India," he added.
Scindia said India had about 144 million air travellers in the pre-covid year of 2019-20. The closest competitor in the transportation sector, the railways, carried a total of about 185 million passengers in air-conditioned first class and second class in the same period, the minister said.
He, however, noted that compared to AC train travel, aviation still lags behind.
“But if you look at the compound annual growth rates (CAGR) of both, within the second class and first class AC sectors of the railways, you are looking at a CAGR of roughly 5.3%. But when you look at CAGR in civil aviation over the last six to seven years, you are looking at a CAGR of 10.6%. Therefore, a time will come where civil aviation shall become the mode of mass transport for most of our citizens," Scindia said.
The minister said that he was holding constructive discussions with states on lowering of value added tax (VAT) on jet fuel so that they get the benefits of greater connectivity and increased jet fuel sales.
Scindia said that he has written to 22 chief ministers urging them to lower VAT on jet fuel. He said that he wished to thank the chief ministers of 16 states who came on board and moved towards a 1-4% regime on VAT, which means that currently, 28 states—up from 12 earlier—are charging VAT on jet fuel in 1-4% range.
“We have only eight states left that are within the 20-30% bracket on ATF. I am still working with those eight states and imploring them to come on board," the minister said.
Scindia also said that after taking charge last July, he had set up eight advisory groups to study key issues in the civil aviation sector.
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