The government is working on a policy for regional airlines and helicopter operators so as to boost last mile connectivity, Aviation Minister Jyotiraditya Scindia said on Monday.
The minister said the emphasis has to be on smaller town airports as well as regional connectivity in India.
“That poses its own sets of issues — economies of scale, leasing costs and pricing — and those are the things we are exploring today,” he said at an event organised by industry body ASSOCHAM.
“We are going to come out with a policy for regional airlines and for helicopters to make them much more economical, to make them much more pervasive, and to provide that last mile connectivity because growth is also going to come from that sector,” he mentioned.
The growth opportunity is coming from smaller cities like Jharsuguda in Odisha and Rupsi in Assam, he said.
“We have to provide the last mile connectivity,” he noted.
The penetration of helicopters today in India is negligible, he mentioned.
India has 130-140 civil helicopters and if you look at a developed country, it has helicopters in thousands, he said.
“So we have to come out with a policy that makes it possible for helicopters to drive the growth especially in north eastern states and in the island states…that is something that I am working on as we speak,” he said.
Aviation sector in India is at an early part of its growth stage, he said.
Scindia said the aviation sector is going to become the backbone of the transportation of our country. Auto sector is known today by the OEMs (original equipment manufacturers) and I want the airline ecosystem to grow similarly, he said.
“In the success of this aviation sector is the success of the government,” he noted. Eleven states had VAT rate on aviation turbine fuel (ATF) between one and four per cent and 25 states had between 15 and 30 per cent when I took charge as the Aviation Minister, he said.
The Centre then went to states and helped them understand that lowering the VAT rate on ATF will assist them in boosting economic growth and tourism, he stated.
In the last over six months, 12 more states have brought their VAT rate on ATF in 1-4 per cent bracket, he stated.
“Let me assure you that I would not rest until VAT is reduced in all states. I have 13 more states to deal with,” he added.
The minister was talking about the 13 states that have the VAT rate on ATF between 15 and 30 per cent.