Govt moots levy to fund regional air-link scheme

FLYERS will soon have to shell out slightly more for tickets to fund the government’s ambitious regional connectivity scheme under which airfares will be capped at

R2,500 for one-hour flights on unserved and under-served routes, reports PTI.

The government on Friday unveiled the draft Regional Connectivity Scheme (RCS), which was mooted in the new civil aviation policy, for consultations with the stakeholders, including state governments, airlines and airport operators.

Stakeholders have been given three weeks time to submit their comments and suggestions on the draft scheme, which is expected to be finalised by August.

Under the proposed scheme, the government would be providing viability gap funding that would be financed through a regional connectivity fund (RCF). Union civil aviation minister Ashok Gajapathi Raju said the RCF would be created for funding RCS “through levy on certain flights”.

In this regard, the government would be charging a levy in the form of per domestic departure from the airline and the move is expected to push the airfares marginally higher.

“The fare for a one-hour flight of approximately 500 kilometres on a fixed-wing aircraft or on a 30minute helicopter ride has been fixed at Rs 2,500,” Raju said while unveiling the draft scheme.

He added that fares for other route lengths or durations will be priced proportionately (though not linearly).

“The states are interested in connectivity... Their feedback will also be taken into account. The central government cannot bypass the state. We will take them into confidence and work along with them to make this (RCS) happen,” Raju said.

The proposed scheme would be applicable for air services connecting unserved and underserved routes ranging from 200 km to 800 km, while there would be no lower limit for hilly, remote, island and security sensitive regions.

“There are 31 airports inactive as of now. So, inactive airports will become low hanging fruits in different states,” said Raju.

There are 394 unserved and 16 under-served airports in the country. “Of the total 410 airports, the scheme is demand driven. Wherever the state governments and airlines are coming forward for making them functional, we would be very happy to revive those airports,” civil aviation secretary RN Choubey said.

Choubey added that there are about 30 such airports that can be used for operations without incurring any extra cost on their revival.

The government has also announced that it would provide funds for revival of another 60 airports, Choubey said, adding that 90 airports are already targeted of the total 410. in bad loans have delayed the IDBI Bank QIP. It is likely to happen as early as in July-September quarter, the official said.

The QIP will help the bank raise fresh capital to shore up its capital base. Besides the QIP, the bank is also looking at raising capital through preference share issue, rights issue or follow-on public offer as part of its overall Rs 8,000crore equity offering plan.

The bank’s capital adequacy has fallen to 11.67% as on March 31 from 13% a year ago due to a surge in bad loans and provisioning. Much of the rise in non-performing assets and provisions has been in the last two quarters of FY16 following the AQR.

During the January-March quarter, the bank witnessed doubling of fresh slippages — loans that slipped into the non-performing category. Slippages for the quarter stood at Rs 10,260 crore against Rs 5,689 crore in the previous quarter. IDBI Bank’s gross NPAs as a percentage of total advances stood at 10.98% in Q4FY16, 510 basis points higher than the same quarter previous year.

Thus, there is an increased need to raise capital from various sources to boost the bank’s capital ratios. Pradesh, Punjab and Chhattisgarh, rice sowing thus far has been marginally higher than it was at this point of time last year.

However, because of scanty rainfall received in key oilseeds growing areas of Saurashtra, Kutch, and Gujarat regions and east Madhya Pradesh, overall oilseeds sowing is down 47% to only 28.71 lakh hectares. In the case of cotton also, the kharif sowing is down 49% from a year ago to 30.5 lakh hectares.

The agriculture ministry has also set the country’s grain production target at 270.10 million tonnes for the 2016-17 crop year (July-June), up 6.7% from the actual grain production of 253.23 million tonnes in 2015-16.

Meanwhile, the India Meteorological Department said “conditions are favourable for further advance of the southwest monsoon in some more parts of east Rajasthan, remaining parts of Himachal Pradesh, Uttarakhand, west Madhya Pradesh, Uttar Pradesh and parts of Punjab, Haryana, Chandigarh and Delhi and west Rajasthan during next 48 hours”.

The progress of the monsoon during next few weeks would be keenly monitored as the rains are expected to cover pulses (moong, tur or arhar and chana) and oilseeds (groundnut and soyabean) growing regions in Gujarat, Rajasthan and Madhya Pradesh. “With the expectation of normal monsoon rains this year, the sowing will be much more than the last two years, especially in crops like pulses, oilseeds and coarse grains,” said Ajay Jakhar, chair man, Bharat Krishak Samaj.