The government is expected to announce the time-frame for the roll-out of its ambitious aviation Regional Connectivity Scheme (RCS) on Friday.
The government is expected to announce the time-frame for the roll-out of its ambitious aviation Regional Connectivity Scheme (RCS) on Friday. The scheme provides for fares to be capped on an hourly basis between a “served” airport (where flights operate) and an “unserved” airport (airports in small towns with no air connectivity in the recent past).
The government is also expected to announce the quantum of its levy per departure on all domestic routes other than flights to small towns and smaller aircraft that was initially proposed at a levy of '8,000 per flight that translates into about '60 per passenger. But a final decision on this is expected soon, probably as early as Friday. Government sources said the government is well within its powers to cap fares on certain routes as part of the RCS, thereby virtually dismissing objections from any airline or any other quarters.
The civil aviation ministry earlier announced it would roll out such a scheme. The RCS will be applicable for routes between a served airport and an unserved or underserved airport at distances from 200km to 800km. The much-publicised cap of '2,500 per seat, for instance, is proposed for a distance of 500km. The proposed RCS will be funded through a subsidy through a small levy per departure on all domestic routes other than flights to small towns and smaller aircraft. While this may mean passengers have to pay more while flying on popular metro routes, the government has insisted this levy will not be much.
And it will be specified soon. Tax sops are also being given to airline operators for the RCS.
People living in very small towns and rural areas with airports/airstrips that are “unserved” (where no commercial flight operates) or “underserved” (where upto seven flights operate per week) can now hope to travel by air at a reasonable fare, with the government having unveiled the draft copy of the RCS on July 1 that will cap air-fares on such routes from a distance of 200km to 800km.
The RCS is at the centre of the Modi Government’s Civil Aviation Policy announced in June. Prime Minister Narendra Modi had tweeted then that the “Civil Aviation Policy gives an impetus to affordability, regional connectivity, safety, infrastructure, which is vital for transforming India”, adding that the “Civil Aviation Policy approved on Wednesday by the Cabinet will transform the sector and greatly benefit passengers”. The Government wants the number of air-tickets sold annually goes up from 8 crore to 30 crore by 2022. Civil Aviation Minister Ashok Gajapathi Raju had said that the policy aims to take flying to the masses by making it affordable and convenient.
The Government on Friday is expected to announce the reaction of states on the matter and whether all states are on board for the RCS. The Union Government had earlier set a pre-condition for states that if they wish to avail of the RCS, they will have to lower the Value Added Tax (VAT) they charge on Aviation Turbine Fuel (ATF) to one percent or less. The Modi Government had also made it clear that the VGF to be shared between the Union and State Governments will be in the ratio of 80:20 while for the North-eastern States, the ratio will be 90:10. The Government is also hoping to tap in to the “goldmine” of 350 unused airfields and airports in remote parts of the country that have existed since world-war II.
