The India's aviation industry suffered a loss of over INR 240bn in the last two financial years during 2020-22, according to the Ministry of Civil Aviation data (MoCA). The ministry has also taken various initiatives to support the aviation industry.
Due to the efforts of the MoCA, the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) has been reduced by 17 states in India. Also, the Goods and Services Tax (GST) on rate has been reduced from 18% to 5% for domestic Maintenance, Repair and Overhaul (MRO) services.
To boost the country’s infrastructure, the Airports Authority of India (AAI) and other airport developers have targeted a capital outlay of approximately INR 980 bn in the next five years for expansion and modification of new and existing terminals as well as the strengthening of runways, among other activities.
The Centre has also approved the Emergency Credit Line Guarantee Scheme (ECLGS) to the aviation sector, according to the Ministry.
Based on the industry demand, the scope of ECLGS has been enhanced to provide credit support to these companies up to 100% of their total credit outstanding (both fund based and non-fund based outstanding) as on reference dates, subject to a cap of INR 150bn per borrower, whichever is lower.