Aviation Minister P Ashok Gajapathi Raju has said that the much-awaited new civil aviation policy will be announced in April and added that the draft policy, which is already in the public domain for suggestions, is at the advanced stage. The policy is yet to firm up its position on critical issues, including changing or scrapping the existing 5/20 rule, which requires airlines to have at least five years of domestic flying experience and minimum 20 aircraft to be able to fly international routes. As many as 15 variations are being looked at with respect to the 5/20 rule.
While the new policy is currently awaiting Cabinet approval, the Minister indicated that it would have several measures that would be helpful in boosting the aircraft Maintenance, Repair and Overhaul (MRO) business and also increase the regional air travel connectivity. The government proposes to simplify the process and procedures to improve the turnaround time in MROs. To make MRO cheaper, the government has proposed to exempt such activities from service tax net and not levy any VAT.
The proposed policy seeks to boost the Indian aviation sector, which has high growth potential, and strengthen regional connectivity. Unveiled last October, the draft civil aviation policy was to be finalised by March and operationalised from April 1, 2016. Scrapping the 5/20 rule was one of the three options suggested in the draft policy, while the other two options were to retain the existing norm or relaxing it by introducing a new criteria of domestic flying credits .