Aviation sector contributing 0.5% of GDP: Study
Terming the aviation sector as the 'real World Wide Web', a study has said it is currently contributing Rs 33,000 crore or 0.5% of India's GDP and supporting 1.7 million jobs in the country, besides creating much-needed critical assets.india Updated: Apr 01, 2012 15:28 IST
Terming the aviation sector as the 'real World Wide Web', a study has said it is currently contributing Rs 33,000 crore or 0.5% of India's GDP and supporting 1.7 million jobs in the country, besides creating much-needed critical assets.
The study, conducted by Oxford Economics for the International Air Transport Association (IATA) recently, says aviation not only provided significant economic benefits to the Indian economy and the citizens, but also critical assets on which modern globalized businesses depend.
Noting that aviation contributed Rs 87,500 crore as taxes and social security, it said, "This contribution is likely to increase further, as the sector recovers following a number of difficult years where many firms suffered losses."
The study to measure the sector's economic footprint in India estimated that a further Rs 16,900 crore worth of government revenue was raised via taxation through indirect and induced channels. But this does not include the domestic aviation fuel taxes which are estimated to be in the range of Rs 1,500-2,000 crore, it said.
The sector also contributed Rs 14,700 crore through its direct output and Rs 10,700 crore indirectly through the supply chain. In addition, it contributed another Rs 58,200 crore in "catalytic" benefits through tourism, which raised its overall contribution to Rs 91,200 crore or 1.5% of GDP, the leading economic forecasting consultancy, floated as a joint venture by Oxford University, said.
The study was jointly released by civil aviation secretary Nasim Zaidi and IATA DG and CEO Tony Tyler recently.
Aviation supported 276,000 jobs directly, another 841,000 jobs indirectly through its supply chain and yet another 605,000 jobs through spending by employees of the sector, the study said, adding that it also supported employment of additional 7.1 million people through the catalytic effects like tourism.
Calling the aviation sector as the "real World Wide Web", it said India had an extensive air transport network consisting of 357 routes connecting major Indian airports to urban agglomerations around the world.
On average there are four flights per day along these routes and a total of 66 of these routes connect India to cities of more than 10 million inhabitants, with an average of seven flights per day available to passengers.
Observing that frequencies were higher to the most economically important destinations, it gave examples of the Delhi-Dubai route in the international sector and Delhi-Mumbai in the domestic sector which had an average of eight and 59 flights per day respectively, benefiting the passengers immensely.
"Improvements in connectivity have been accompanied by a steady fall in the cost of air transport services. The cost of air transport services, in real terms, has fallen by around on% a year over the past 40 years, contributing to the rapid expansion in the volume of trade seen over this period," the study said.
Observing that Indian airlines were responsible for carrying 71% of passengers and 78% of freight, it said the wages, profits and tax revenues created by them "flows through the Indian economy, generating multiplier effects on Indian national income or GDP".