He requested that the governments of Punjab, Assam, Maharashtra, West Bengal, Delhi, Tamil Nadu, Rajasthan, and Bihar reduce VAT in order to grow the civil aviation sector in their respective states.
Scindia promised to improve air travel connectivity in these eight states in exchange for lowering ATF VAT.
“I humbly request that you (the eight states) reduce the VAT on ATF.” “I promise you that I will increase air connectivity in your states,” Scindia said at the end of a two-day conference of civil aviation ministers from all states and union territories. The minister stated that 12 states had long-term perspectives on this issue and had reduced ATF VAT months ago. “As a result, they increased travel to their states because planes go where raw materials are cheap.” “And ATF accounts for 45–50per cent of the total cost of the airline industry,” he adds.
The minister made the announcement while pointing out that the growth rate in such cities has risen to 21per cent between 2015 and 2020, up from 10per cent between 2010 and 2015. “It is projected that new growth will come from tier 2 and tier 3 cities,” the minister said.
Scindia, referring to Prime Minister Narendra Modi’s vision to “democratise” the civil aviation sector, stated that it is not meant for a specific field, but for the common man. “As a result, this government’s consistent effort is to concentrate on the development of airport infrastructure in smaller cities, which will be the new growth area in the days ahead,” said the Minister.
Scindia explained the ‘UDAN’ scheme, a regional airport development programme of the Government of India and part of the Regional Connectivity Scheme of upgrading under-serviced air routes to make air travel more affordable and improve economic development in India. The UDAN scheme could allow nearly 2.10 lakh flights to fly and nearly 1.10 crore passengers to travel. These 1.10 crore people were among those who had never considered flying. “
In terms of connectivity, Scindia stated, “We have been able to connect multiple new centres and states.”