House panel slams Centre for ignoring aviation sector

A Parliamentary Standing Committee on Transport has criticised the Union Government for offering nothing special to the civil aviation sector except for an equity boost to Air India, despite the sector witnessing turbulent times.

In its latest report, the Committee on Transport, Tourism and Culture has also noted that reduced allocation in this year’s budget for the Ministry of Civil Aviation has not augured well for the aviation sector, which has witnessed tough times over the past few years due to rise in fuel costs, rupee depreciation and general slowdown in the economy.

“The committee notes that the Ministry of Civil Aviation was able to get only 56 per cent of the projected plan allocation for the current fiscal. The committee feels that such inadequate allocation will definitely hamper progress of ongoing infrastructure projects and other aviation-related programmes,” it said in a report tabled in the Rajya Sabha last week.

The committee also hoped that the ministry would expedite the approval of various schemes and persuade the Planning Commission to allocate more funds at the revised estimates (RE) stage.

The committee also hoped that the allocated funds will be judiciously utilised to avoid any reduced allocation at the RE stage.

The committee also flayed the government for ignoring in the Budget the civil aviation industry’s most vociferous demand of reduction in sales tax on aviation turbine fuel (ATF), which varies state-wise from 4 per cent to 25 per cent.  The demand for “declared goods” status for ATF could also not be addressed by the government, the committee has rued.
ATF prices in India remain among the highest, and this is among the main causes for the higher cost of operations of air service providers.

The committee also felt that the creation of the Civil Aviation Authority to take care of all the regulatory and investigative needs of the aviation sector, whose proposal is still pending with the ministry, must be expedited.

“The ministry has been informing the committee for a couple of years now that it is contemplating the Civil Aviation Authority to bifurcate and delineate the functions of policy maker, regulator and investigator in the civil aviation sector. The committee hopes that the draft bill for the purpose would be accorded priority to give the authority required shape,” said the panel.