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Tax on ATF between 1-5% sounds reasonable: Civil Aviation Minister Ashok Gajapati Raju

The minister also said the government is open to any good idea from stakeholders on abolishing the 5/20 rule.

, ET Bureau|
May 22, 2015, 04.00 AM IST
The minister also said the government is open to any good idea from stakeholders on abolishing the 5/20 rule.
The minister also said the government is open to any good idea from stakeholders on abolishing the 5/20 rule.
Civil Aviation Minister Ashok Gajapati Raju says tax on aviation turbine fuel (ATF) is very high and that reducing it to 1-5 per cent would be reasonable. In an interview with ET, the minister also said the government is open to any good idea from stakeholders on abolishing the 5/20 rule. Edited excerpts:

What have been the learnings from the first year of operations?

Civil aviation is a technical ministry and most people connected with politics have limited exposure to the sector. This is a sector which is highly taxed. It was traditionally considered elitist, and the way our economy has grown, it is now coming in the reach of the common man. In the past one year, we saw GPS-aided geo-augmented navigation system—completed by ISRO and AAI—get the DGCA’s approval. Another good thing that has happened is getting back the FAA status. Now that it has come our way, it helps airlines mount flights to the US. In the past one year, aviation has helped in rescue and relief operations during natural disasters. So the aviation sector has also fulfilled their social commitment.

How do you plan to rationalise taxes in the aviation sector?

Basically, tax on ATF is very high and also accounts for a large part of airlines’ cost of operations in India. I have written to all chief ministers, and a few states like Madhya Pradesh and Maharashtra have brought it down already and that has led to an increase in aviation activity in those states. The tax today ranges anywhere between 1 per cent and 30 per cent and dampers activity. Tax on ATF between 1 per cent and 5 per cent sounds reasonable. Convincing states is difficult but some of them have understood and we are seeing a change.

The ministry has not achieved much in terms of on abolishing the 5/20 policy. Many have said the formula to replace 5/20 is a complex one. How do you plan to change that?

I still believe that 5/20 should go. People who do not want any regulation will criticise any regulation. On the complexity, I will put it like this: I come from a political background and done long years as a legislator. We had a governor called Ram Lal who got 168 of us in a house of 294 arrested and declared that we lost majority. History proved him wrong. Probably, some people have problems with complex math, like Ram Lal had. What can we do of that? Now we need to encourage aviation activity in places where there is no connectivity. There are 31 or 32 airports where there have been no landings and take offs in the past oneand-a-half years. Ultimately we are responsible to the people of the country and our job is to ensure connectivity for all. We are still open to any good idea from all stakeholders, including airlines, till the time the policy is finalised.

Concerns have been raised over privileges to MPs at airports and in the aircraft? Would you be looking at reducing them?

There are no privileges. An MP gets an extra glass of water and a chair in the lounge. What MPs get are not privileges for being a politician, but because they are frequent fliers. The scenario is a little different when it comes to aviation, and MPs get special privileges as they become frequent fliers.

But security agencies complain of MPs trying to break rules at airports. Your comment?

Rules should be followed at any cost and no one should break rules and security should be of prime concern. I receive lot of requests for cars to be allowed on the runway. This should not happen. My official car, allotted to me by the government, used to go on to the tarmac. I have asked them not to take it and I prefer taking a ferry. Any car that is not sterile and goes on to the tarmac is not safe and should be discouraged.
There were reports that you carried a matchbox inside an aircraft...

Some people thought it was a safety issue, and they are entitled to their views. Likewise, my wife is also entitled to ask me not to carry it inside the aircraft and leave it in the car. I leave it in the car now.

How do you plan to convince MPs who want more privileges at airports?

We are trying to discourage any extra privileges that people seek. Most of my colleagues are reasonable and understand it, but some say it used to happen earlier with so and so minister.

Would you like to travel like a normal passenger to send out a message?

There is no difference. I have taken the airport metro to the airport a lot of times and any passenger is a normal passenger, when he/she is inside the aircraft. So, I do not think there is any difference between a civil aviation minister and a normal passenger, when it comes to flying.

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