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Chapter # 15. Civil Aviation


  • Enhance the affordability of flying to enable an increase in domestic ticket sales from 103.75 million in 2016-171 to 300 million by 2022.2
  • Double air cargo handled from about 3.3 million tonnes in 2017-18 to about 6.5 million tonnes.
  • Expand the maintenance, repair and overhaul (MRO) industry from USD 1.8 billion in 2017 to USD 2.3 billion.
  • Expand airport capacity more than five times to handle one billion trips a year.
  • Enhance availability and affordability of regional air connectivity and revive/upgrade 56 unserved airports and 31 unserved helipads through the Regional Connectivity Scheme – Ude Desh Ka Aam Naagrik (RCS-UDAN).
  • Ensure that airport tariffs, taxes on fuel, landing charges, passenger services, cargo and other charges are determined in an efficient, fair and transparent manner.

Current Situation

The civil aviation sector contributed USD8.9 billion to India’s GDP in 2014 and supported 1.31 million direct, indirect and induced aviation jobs.3 In 2016, the demand for domestic air travel was twice that in China.4

  • India’s domestic air traffic made up 69 per cent of total airline traffic in South Asia.5 The World Economic Forum’s Global Competitiveness Report, 2018 ranks India as 53rd out of 140 countries worldwide in air transport infrastructure.
  • The Airport Authority of India (AAI) aims to bring around 250 airports under operation across the country by 2020.6 The Ministry of Civil Aviation’s regional connectivity scheme, UDAN, is a 10-year scheme, which will promote balanced regional growth and make flying affordable for the population.
  • It will help enhance connectivity to the country’s unserved and underserved airports.
  • India’s civil aviation sector has been growing steadily; the number of passengers was 158 million in 2016-17.7 Domestic passenger traffic increased at a CAGR of almost 10 per cent between 2007-08 and 2016-17 and international passenger traffic grew at a CAGR of 8.07 per cent during the same period.8
  • Between 2014-15 and 2016-17 in particular, traffic growth in the domestic passenger segment was 48 per cent and 20 per cent in the international segment.9 India is also catching up with other leading aviation markets in terms of market penetration.
  • There has been an increase in air cargo, both domestically and internationally, in 2016-17. IATA has forecast that India will cross over into the top 10 air freight markets in 2018-19.


  • Capacity and infrastructure: Due to the rapid expansion of India’s civil aviation sector, airspace, parking bays and runway slots will become increasingly scarce over the next few years, especially at metro airports. Mumbai and Chennai airports are already close to saturation.
  • Capacity and infrastructure constraints could decrease efficiency and safety and have negative economic effects. Inadequate hangar space and unavailability of land to expand airports at their current sites, particularly in major cities, are two of the major constraints that face the sector.
  • While this may be less binding in metro cities where the number of passengers is large enough to support more than one airport, building more than one airport is not feasible in non-metro cities because of low passenger volume.
  • Skilled workers: According to a study conducted by the Ministry of Civil Aviation, Indian aviation could directly support 1.0 to 1.2 million jobs by 2035. This implies that about 0.25 million persons will need to be skilled over the next 10 years.
  • Shortage and gaps in availability of indus-try-recognised skills – from airline pilots and crew to maintenance and ground handling personnel – could constrain the growth of different segments of the sector.
  • Aviation Gasoline (AvGas) is used as fuel by almost all training aircraft. This fuel is imported, its supply is not assured and it attracts a tax of 18 per cent (earlier 28 per cent) under GST. Coupled with a shortage of instructors, this makes flying training an expensive and time-consuming exercise.
  • High cost to passengers and of air cargo:
  • Tariff determination: The Ministry of Civil Aviation has mandated that all airports move from a single to a hybrid till structure. Although this is beneficial as it incentivizes infrastructure investment, it raises costs for airlines and passengers.
  • Taxes on aviation turbine fuel (ATF): Due to high taxes and lack of competition among providers, ATF is relatively expensive in India. Since it remains outside the GST network, there are also regional disparities in its price.
  • The price of aviation fuel in India may be up to 60 per cent per cent higher than prices in ASEAN and the Middle East countries because of high central and state taxes.10
  • Fuel cost as a percentage of operating charges amounts to 45 per cent11 in India as compared to the global average of 30 per cent.
  • Incidence of GST on Aircraft Leases and Spare Parts: GST of 5 per cent is applied on aircraft lease rentals; GST ranges between 5 per cent and 28 per cent on aircraft engines and spare parts. This also raises costs for the sector.
  • Aviation safety: Although, the number of aviation safety violations in 2017 (337) has declined in comparison to 2016 (442), the absolute number still remains high.

Way Forward

  1. Enhance aviation infrastructure
  • Complete the planned airports under the UDAN initiative in a time-bound manner. Revival of 50 un-served and under-served airports/airstrips should be completed.
  • In addition to completing two new airports for Delhi and Mumbai by 2022, the infrastructure capacity in the 10 biggest airports (in terms of traffic) should be significantly augmented.
  • Include provisions for domestic hub development while auctioning traffic rights.
  1. Increase investment in the sector through financial and infrastructure support
  • Reduce taxes on MRO services and consider granting infrastructure status for MRO.
  • Increase aircraft parking infrastructure and facilities at metro airports.
  • Create additional parking hubs at suitable locations, accessible through short haul flights, to accommodate additional aircraft.
  • Monetize vacant real estate near AAI airports in all major centres of traffic to increase non-aeronautical revenues.
  1. Address shortage of skilled manpower
  • Promote collaboration between original equipment manufacturers (OEMs), industry and educational institutes to teach the latest concepts in the aviation industry including management principles, IT in aviation, etc.
  • Formulate long-term plans for advanced research in aviation technologies to create a manufacturing ecosystem in the country.
  • Expedite commencement of courses by the National Aviation University after due consultation with stakeholders.
  • Facilitate greater involvement of the private sector in sponsoring aviation institutions, industrial training and R&D projects.
  • A further reduction in GST rates on Avgas will allow flying training organizations to make training more affordable.
  1. Promote air cargo growth
  • Promote “Fly-from-India” through the creation of transhipment hubs. The transhipment hub in Delhi is scheduled to be launched in May 2018 followed by the launch of those in Chennai and Mumbai.
  • Develop an integrated digital supply chain or e-cargo gateway based on the National Air Cargo Community System (NACCS) platform. The modular development may include the following digital business enablers as plug-ins:
  • e-contracting/booking of cargo – with access to financial payment gateways.
  • e-transportation multimodality (road-air first/last mile connectivity).
  • e-compliances (initially online clearances by six participating governmental agencies; rest to follow).
  • Cargo Sewa – a grievance redressal module linked to Air Sewa.
  1. Ease the regulatory environment for airports
  • Deregulate further and open up the aviation market to help increase passenger and freight traffic in India.
  • Adopt a consistent model for tariff determination so that it reduces passenger cost.
  • Align taxation and pricing structure to global benchmarks by considering bringing aviation turbine fuel (ATF) under the rubric of GST.
  • Amend the AAI Act to allow commercial usage of land with airports by liberalising end-use restrictions for existing and future airports.
  • Strengthen regulatory capacity with respect to public private partnerships and streamline the judicial review process to ensure timely implementation of DGCA’s decisions.
  • Ensure that the DGCA acts as a truly independent regulator, with the Ministry of Civil Aviation focusing on policies.
  • Meet the regulatory and security requirements prescribed by the International Civil Aviation Organization (ICAO) at all times. Additional skilling of personnel may be required for this and the DGCA should dequately build the capabilities of its staff to ensure compliance.
  1. Prioritize aviation safety12
  • Shift focus to pre-empting and preventing accidents/incidents.
  • There should be zero tolerance of safety violations.
  • DGCA should be given autonomy for an effective aviation safety oversight system. It should also be authorized to impose fines and penalties depending upon the nature of violations.
  • DGCA should continue ensuring real time safety tracking and prompt incident reporting.
  • DGCA should create a single-window system for all aviation related transactions, queries and complaints.


Chapter # 41. Data Led Governance and Policy Making

Objectives Evidence based policy making should be made integral to the overall governance structure in New India, 2022-23. To achieve this, timely gen

Chapter # 40. Optimizing the Use of Land Resources

Optimizing the Use of Land Resources-Ensuring that land markets function smoothly, through efficient allocation of land across uses, provision of secu

Chapter # 39. Modernizing City Governance For Urban Transformation

Objective  City Governance For Urban Transformation To transform our cities into economically vibrant and environmentally sustainable habitats that p

Chapter # 38. Civil Services Reforms

Objective  civil-services-reforms To put in place a reformed system of recruitment, training and performance evaluation of the civil service to ensur

Chapter # 37. Legal, Judicial and Police Reforms

Objective To ensure the safety and security of citizens and ensure access to effective legal systems and speedy delivery of justice. Current Situation

Chapter # 36. The North-East Region

Objectives The North-East Region (NER) should: Have adequate road, rail and air connectivity, waterways, internet connectivity and financial inclusion

Chapter # 35. Balanced Regional Development: Transforming Aspirational Districts

Objective  Balanced Regional Development: Transforming Aspirational Districts Achieve balanced development in India by uplifting 115 districts, curre

Chapter # 34. Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs), Other Tribal Groups and Minorities

SCs, STs, OBCs, De-Notified Tribes (DNTs), Nomadic Tribes (NTs) and Semi-Nomadic Tribes (SNTs) Objective  To accelerate the socio-economic developm

Chapter # 33. Senior Citizens, Persons with Disability and Transgender Persons

SENIOR CITIZENS  Objective To ensure a life of dignity, social security and safety for senior citizens, enabling them to actively participate in econ

Chapter # 32. Gender

Objective  To create an enabling environment, sans institutional and structural barriers. To enhance the female labour force participation rate to at

Chapter # 31. Nutrition

Objectives  Under POSHAN Abhiyaan, achieve the following outcomes by 2022-23, compared to the baseline of 2015-16 (National Family Health Survey-4):

Chapter # 30. Universal Health Coverage

Objectives  On the strong platform of Pradhan Mantri – Jan Arogya Yojana (PM-JAY): Attain a coverage of at least 75 per cent of the population

Chapter # 29. Human Resources for Health

Objectives  Achieve a doctor-population ratio of at least 1:1400 (WHO norm 1:1000) and nurse-population ratio of at least 1:500 (WHO norm 1:400) by 2

Chapter # 28. Comprehensive Primary Health Care

Objectives  Under Ayushman Bharat, scale-up a new vision for comprehensive primary health care across the country, built on the platform of health an

Chapter # 27. Public Health Management and Action

Objectives  To revamp radically the public and preventive health system in the nation through the following strategic interventions: Mobilize public

Chapter # 26. Skill Development

Obejctives  For harnessing the demographic advantage that it enjoys, India needs to build the capacity and infrastructure for skilling/reskilling/up-

Chapter # 25. Teacher Education and Training

Objectives There cannot be a quality education system without quality teachers. Therefore, a thorough revamp of the entire ecosystem of teacher educat

Chapter # 24. Higher Education

Objectives  Increase the gross enrolment ratio (GER) in higher education from 25 per cent in 2016-17 to 35 per cent by 2022-23. Make higher education

23. School Education

Objectives Universal access and retention: o Hundred per cent enrolment and retention at elementary education and secondary education levels; achieve

Chapter # 22. Sustainable Environment

Objective  The objective is to maintain a clean, green and healthy environment with peoples’ participation to support higher and inclusive economic

Chapter # 21. Water Resources

Objectives By 2022-23, India’s water resources management strategy should facilitate water security to ensure adequate availability of water for l

Chapter # 20. Swash Bharat Mission

Objectives The key objectives of the Swachh Bharat Mission include: 1. Making India Open Defecation Free (ODF) by October 2, 2019. 2. Carrying out ext

Chapter # 19.Smart Cities for Urban Transformation

Objectives  Leverage the ‘Smart Cities’ concept in select urban clusters to: Drive job creation and economic growth. Significantly improve effici

Chapter # 18. Digital Connectivity

Objectives Given the relevance of digital connectivity to economic growth and the need to eliminate the digital divide by 2022-23, India should aim to

Chapter # 17. Logistics

Objectives Achieve multi-modal movement of cargo on par with global logistics standards. Reduce the logistics cost to less than 10 per cent of GDP fro

Chapter # 16.Ports, Shipping and Inland Waterways

Objectives  Double the share of freight transported by coastal shipping and inland waterways from 6 per cent in 2016-171 to 12 per cent by 2025. Incr

Chapter # 15. Civil Aviation

Objectives Enhance the affordability of flying to enable an increase in domestic ticket sales from 103.75 million in 2016-171 to 300 million by 2022.2

Chapter # 14. Railways

Objectives By 2022-23, India should have a rail network that is not only efficient, reliable and safe, but is also cost-effective and accessible, both

Chapter # 13. Surface Transport

Objectives Increasing the coverage and quality of roads and highways is critical to enhancing connectivity and internal and external trade. By 2022-23

Chapter # 12. Energy

Objectives The government’s on-going energy sector policies aim “to provide access to affordable, reliable, sustainable and modern energy”. At t

Chapter # 11. Minerals

Objectives Double the area explored from 10 per cent of obvious geological potential (OGP) area to 20 per cent.1 Accelerate the growth of the mining s

Chapter # 10. Travel, Tourism and Hospitality

Objectives  Increase India’s share in global international tourist arrivals from 1.18 per cent to 3 per cent. Increase the number of foreign touris

Chapter # 9. Housing For All

Objectives Provide every family with a pucca house, with a water connection, toilet facilities, and 24×7 electricity supply and access. Build 2.9

Chapter # 8. Financial Inclusion

Objectives Banking for the unbanked  o Bank accounts: Ensuring universal access to bank accounts, which are a gateway to all financial services.  o

Chapter # 7.Doubling Farmers’ Income (III): Value Chain & Rural Infrastructure

Objectives • Transform the rural economy through the creation of modern rural infrastructure and an integrated value chain system. • Leverage the

Chapter # 6.Doubling Farmers’ Income (II): Policy & Governance

Objectives Create a policy environment that enables income security for farmers, whilst maintaining India’s food security. Encourage the participati

Chapter # 5.Doubling Farmers’ Income (I): Modernizing Agriculture

Objectives • Modernize agricultural technology, increase productivity, efficiency and crop diversification. • Generate income and employment throu

Chapter # 4.Industry

Objectives Double the current growth rate of the manufac-turing sector by 2022. Promote in a planned manner the adoption of the latest technology adva

Chapter # 3. Technology and Innovation

Objectives India should be among the top 50 countries in the Global Innovation Index by 2022-23.1 Five of our scientific research institutions should

Chapter # 2.Employment and Labour Reforms

Objectives Complete codification of central labour laws into four codes by 2019. Increase female labour force participation to at least 30 per cent by

Chapter # 1 Growth (India @ 75)

Objectives Steadily accelerate the gross domestic product(GDP) growth rate to achieve a target of about 8 per cent during 2018-23 This will raise the


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