India’s Civil Aviation Vision under Minister Ram Mohan Naidu:
At 37, Ram Mohan Naidu is the youngest minister in the Union Cabinet and is focused on shaping India’s aviation industry. In an interview at the ET India Ascends event, Naidu shared insights into the sector’s rapid expansion and future direction.
1. Transformative Growth in Aviation:
- Since 2014, India has expanded from 74 to 157 airports, with air passenger numbers doubling to over 40 million annually. The aircraft fleet has grown from 400 to over 800, with 1,500 additional orders in place, establishing India as a leading aviation hub globally.
2. Job Creation through Domestic Maintenance Expansion:
- Naidu highlighted efforts to localize the Maintenance, Repair, and Overhaul (MRO) sector, which could significantly reduce dependency on foreign services and create domestic jobs. Reforms like a unified 5% GST on MRO parts and extended warranties aim to attract MRO businesses to India.
3. Enhancing Affordability and Connectivity via UDAN:
- The UDAN scheme has launched over 600 regional routes, connecting underserved airports and making flying more affordable, especially for tier-2 and tier-3 cities.
4. Addressing Fair Pricing Amid Limited Competition:
- Although the sector is close to a duopoly, the government monitors airfares, engaging airlines to prevent excessive price hikes. To foster competition, smaller airlines are encouraged to enter regional markets.
5. Supporting Financially Troubled Airlines:
- Recognizing the volatility of the industry due to global factors, the government provides policy support and open dialogue with airlines. Initiatives include viability gap funding under UDAN and calls for state governments to lower aviation fuel taxes to ease operational costs.
6. Collaborative Approach with States:
- States, aware of aviation’s economic impact, are increasingly proactive in building airports and supporting aviation initiatives, with the Centre acting as a facilitator.
Minister Naidu’s vision emphasizes a balanced approach that combines infrastructure expansion, financial support for struggling airlines, and policy reforms, positioning India’s aviation sector for continued growth and accessibility.
