The Narendra Modi-led NDA government is planning to open 100 additional airports by 2024 to boost the economy. The NITI Aayog proposal includes 1,000 new routes, which will connect smaller towns and villages and establish a plane-leasing financing business by 2024.
The steps to start a plane-lease financing business in the country was also discussed during an infrastructure review meeting held in mid-October, reports Bloomberg. In a bid to revive growth, Prime Minister Narendra Modi is keen to double down on infrastructure projects to achieve a target of making India a $5 trillion economy by 2025.
Also due to the economic slowdown which is at a six-year low, the government cut corporate tax rates last month, putting India on par with some of the lowest in Asia, to help compete with the likes of Vietnam and Indonesia for investments amid global trade tensions.
China eyes 450 commercial airports by 2035
India's plans to expedite airport development still trails that of China's, which has set a goal of having 450 commercial airports by 2035, almost double the number at the end of 2018. A spokesman at India's civil aviation ministry was not immediately available for comment.
The proposal by India's state think tank also includes boosting the number of locally trained pilots to 600 a year and double the domestic aircraft fleet to 1,200 during the period, the people said.
The Indian government has committed investments of 1 trillion rupees to build airports in the next 5 years.
Just three years back, only 75 of India's 450 runways were functional, as airlines avoided flying to smaller, World War-era airstrips in smaller towns. But Modi's subsidy program, which partly funds airline losses while capping fares on remote routes, has helped add as many as 38 airports to the nation's aviation map at the start of this year, while contracts were given to airlines to start flights to a further 63 airports with no or limited connectivity.
While the lure of India -- with an emerging middle class flying for the first time -- has attracted companies such as Singapore Airlines Ltd. and AirAsia Bhd. to set up local units, provincial taxes in the nation make jet fuel one of the most expensive in the world. The government is aware of the high taxation burden and higher jet fuel prices, and will rationalize the tax regime as soon as next year, the people said.
India will also encourage the use of drones -- for which it announced a policy this year allowing unmanned vehicles to fly beyond the line of sight -- and sees the number of legal drones reaching a million by 2024, the people said. The country will prepare drone corridors by 2021, and allow delivery of goods by drones by 2023, they said.
(With agency inputs)