In her fourth set of announcements on the Rs 20 lakh crore stimulus package to tide over the coronavirus crisis, Union Finance Minister Nirmala Sitharaman on Saturday said that restrictions on Indian air space will be eased to make civilian flying more efficient. The finance minister claimed that the move to open more air space for civilian flights will give Rs 1,000 crore per year benefits for the aviation sector, facing unprecedented crisis amid lockdown to contain coronavirus pandemic.
"As of today, only 50% of India's airspace is free for use. This needs to be increased and optimised. This will not only save cost of fuel, but also save time. This is being done to give civil aviation a boost. This is a sector which has tremendous potential in India," Sitharaman said in a press conference.
Six more airports to be privatised
The finance minister also announced to open six more airports for private players, a move, she said, will help in the creation of more world-class airports in the country. Sitharaman said that an additional investment of Rs 13,000 crore in 12 airports is expected from the first two rounds. Apart from that, the government has also decided to encourage maintenance, repairs and overhaul (MRO) of aircraft in the country. Currently, most of the MRO work is done abroad and the government is hoping to attract foreign airlines to get MRO work done in India.
"Once a hub is set up, India can even be an attractive market for foreign airlines to get MRO done here. This will be done both for military and civilian aircraft. This will save at least Rs 800-1,200 crore every two years," she said.
As part of the "AatmaNirbhar Economy" in the Civil Aviation Sector, the government has decided to rationalise the tax regime for the MRO ecosystem in the country. Aircraft component repairs and airframe maintenance to increase from Rs 800 crore to Rs 2000 crores in three years. Convergence between defence sector and the civil MROs will be established to create economics of scale, she said.