Rémi Maillard
Rémi Maillard, Chair, Civil Aviation Committee of FICCI, President and MD, Airbus India & South Asia
I congratulate the Finance Minister for addressing the aspirations of India through an expansive budget – one in which infrastructure development has been identified as one of the six pillars for building an ‘Atmanirbhar Bharat’.
The government has made some forward-leaning announcements for the aviation sector, including tax exemption on aircraft leasing and aircraft rentals made to foreign companies. This measure is significant for multiple reasons.
First, it will provide some relief to Indian carriers which are bleeding cash because of the COVID-19 pandemic. Second, the proposal
sits well with India’s desire to develop a local aircraft leasing and financing industry to accelerate the maturity and ‘Atmanirbharta’ of the Indian aviation industry. Third, tax support for aircraft leasing and rentals will help grow the fleet size in India as a vast majority of these aircraft will likely be leased.
The budget has also announced an ambitious plan to monetise airports in Tier 2 & 3 cities for operations and management concession. Under its strategic disinvestment proposal, the government will look to complete the process of privatisation of Air India and Pawan Hans in 2021-22. Strategic disinvestment receipts will be vital to meeting the government’s infrastructure and social development goals.
While the aviation industry welcomes today’s budget announcements, it is not out of the woods yet and continues to hope for financial and policy support from the government. Immediate credit support, lower tax rates on aviation fuel and imported aircraft parts for MRO, flexible use of the airspace and fully liberalized code sharing, among others, can make the Indian aviation industry not only more competitive but also distinctly attractive. Given the symbiotic relationship between aviation and economic growth, continued government support to the sector can only catalyse the country’s expansion and accelerate it towards achieving a $5-trillion economy by 2024.