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HindustanTimes Thu,28 Aug 2014

Planned tax on flyers may help fuel flights to small towns

HT Correspondent , Hindustan Times  New Delhi, May 20, 2013
First Published: 23:18 IST(20/5/2013) | Last Updated: 23:20 IST(20/5/2013)

The aviation ministry may impose a new cess on flyers to help increase connectivity to smaller towns.

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An Essential Services Fund could be created with the money collected through the new tax that would help provide subsidy to airlines operating to smaller cities and areas like the north-east.

This, among other proposals, would be taken up for discussion on Tuesday when top officials of the ministry meet to discuss issues regarding connectivity that have been lingering on for years.

Former cabinet secretary Naresh Chandra and HDFC chairman Deepak Parekh are special invitees to the meeting.

The meeting, to be chaired by aviation minister Ajit Singh, will discuss a report prepared by Deloitte on regional connectivity, sources said.

“No decision has been taken but if a cess is to be imposed it would be of a very minimal amount. There is also a proposal to auction routes among airlines,” an official said.

Many in the aviation ministry believe that current rules regarding regional connectivity that require airlines to operate a certain percentage of flights to places like the north-east, hasn’t been of much help and the system should be replaced with one where the government provides subsidies to airlines to operate on loss-making routes.

Other proposals to be discussed include setting up of no-frills airports.


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