High taxes, low fares and a highly competitive market mean all but one of India’s big airlines are losing cash. Photo: Ramesh Pathania/Mint New Delhi: No decision has been taken to privatise Air India, with the government saying it was close to finalising a short-term strategy to strengthen the burgeoning civil aviation sector, including slashing taxes on jet fuel. “By and large, there is a general feeling that the aviation sector in India is no way near its potential. So we are working on that and trying to achieve that potential… We are working out a short-term strategy, setting some goals for ourselves within the Ministry,”
civil aviation minister Ashok Gajapathi Raju told reporters in New Delhi. He was responding to a question whether the ministry had formulated a 100-day plan for the aviation sector after he recently met Prime Minister Narendra Modi. Asked whether Air India’s privatisation was discussed at this meeting, he said the national carrier formed “a substantive part of our discussion. All issues relating to Air India was discussed. No decision has been taken and I would not like to stir the hornet’s nest”. Raju said the entire gamut of issues concerning aviation was discussed at the meeting on infrastructure taken by the prime minister, “but we took no decision”. Civil aviation secretary Ashok Lavasa said “a few specific citizen-centric initiatives have been identified.
We are working on them and will make them known in a few days.” Asked about high sales tax levied by states on aviation turbine fuel, Raju said the issue of state taxes was also discussed and “we are trying to take various states into confidence on the matter” so that some relief can be granted to the aviation sector. “The taxes vary from state to state. On the aviation side, they want the taxes down. We have to talk to the states as we are in a federal structure,” the minister said.