Announcing tranche 4 of Rs 20 lakh crore economic stimulus, Finance Minister Nirmala Sitharaman on Saturday said that the government has plans to make India a global hub for Aircraft Maintenance, Repair and Overhaul (MRO).
The FM said that the tax regime for the MRO ecosystem is being altered so that it favours setting up hub in India. Aircraft component repairs and airframe maintenance would increase from Rs 800 crores to Rs 2,000 crores in three years, she added.
"Major engine manufacturers in the world would set up engine repair facilities in India in the coming year," FM Sitharaman said, adding that convergence between defence sector and the civil MROs would also be established to create economies of scale.
As a result, maintenance cost for airlines will come down which will benefit India. "This is a major step that we want to make sure India benefits from. Not just civilians, but also defence aircrafts will benefit from this move," she said.
Pitching for efficient airspace management, she said that over the decades, we have not been flying through shortest routes. As a result, the customer ends up paying more while pilots have to fly extra. "Optimum utilisation of routes is going to happen, we will be able to get to our destination in the shortest possible time," she said.
The government will ease restrictions on the utilisation of Indian air space so that civilian flying becomes more efficient. This will bring a total benefit of Rs 1,000 crore per year for the aviation sector, says FM Sitharaman.
She said that Airports Authority of India (AAI) has awarded 3 airports out of 6 for operation and maintenance on public-private partnership (PPP) basis. Besides, six more airports identified in second round bid to commence immediately, she said.
Meanwhile, the private players are expected to make additional investment of around Rs 13,000 crore in 12 airports in first and second rounds, she added.