The civil aviation minister Ashok Gajapathi Raju told Prime Minister Narendra Modi that the civil aviation sector in India is on the verge of collapse with accumulated losses of Rs 49,000 crore of which Air India contributes a staggering Rs 30,000 crore and it needs an urgent boost to prevent more Kingfisher-type meltdowns and job losses.
Ashok Gajapathi Raju pointing out that poor returns from airports, burgeoning costs and a tax structure that hurt the maintenance, repair and overhaul industry in Indian context .The long neglect of the working of the sector has put it on huge losses and deep under debt that was concluded in the review meeting that poor returns from airports, burgeoning costs and a tax structure has hurt maintenance, repair and overhaul industry .
The minister was critical of the current tax structure that make India a 35% more expensive destination for MRO operations in comparison to a nearest place like Singapore.The ministry in its presentation stressed on the potential of the MRO industry generating large revenues and enhancing employment if service tax and VAT structures were made more attractive. Tweaking tax rates can give employment to skilled hands and bring business to India while there was little revenue in the current circumstances. .
Indian passengers travelling by sub-urban and short-haul trains account for 52% of the traffic, their share in total passenger revenues was around 6-7%. This segment accounted for around 60% of the annual subsidy of Rs 26,000 crore, and the top-ranking officials justified the fare hike announcement as the railways felt it has strong reasons to argue its case.
The Railway Chairman Arunendra Kumar contended that the fare still included at least 50% subsidy for season tickets, and the actual increase is not significant, although it may look steep in percentage terms.Railways is expected to mop up around Rs 9,200 crore from the decision to increase passenger fares by 14.2% in all classes while freight charge was hiked by 6.5% with effect from June 25.
Finance minister Arun Jaitley clarified and said, "The Indian Railways for the last few years have been running at a loss. The only way that railways can survive is when users pay for the facilities that they avail. The passenger services have been subsidised by the freight traffic... A loss making railway will provide below-par services. It will eventually not even have the resources to pay its bill. India must decide whether it wants a world class railway or a ramshackle one. The railway minister has taken a difficult but a correct decision,".
INDIA HONEST sees the decision to raise passenger fares and freight charges is seen as part of the "bitter medicine" Prime Minister Narendra Modi had said that it was necessary to set right faltering finances that he said were aggravated by UPA's mismanagement of the economy.
But IH notes that this charge was vehemently denied by none other than the former finance minister P Chidambaram, when one has still to find the skeletons in the fiscal status cupboard of India, where lot of unpaid subsidies and huge neglect of development budget in most of the sectors including defence is now clearly visible. Only a detailed white paper on the status before the budget could establish the facts.
INDIA HONEST argues before the people , if Modi should be allowed to work for a better future of various Indian institutions for more effective services and welfare for the common people ? This is a critical and important question the people have to think and answer before long.