India's aviation sector has wings, but airlines can't fly high

India's aviation sector has wings, but airlines can't fly high. The government needs to take steps to address the challenges faced by the sector.

India's aviation sector has wings, but airlines can't fly high

Naveen Wadhwa

Vice-President, Taxmann

Budget with ET

India's aviation sector has seen a remarkable resurgence in recent years, thanks to the government's focus on infrastructure development and the increasing disposable income of the middle class. However, despite the growth, the sector is still grappling with a number of challenges, including high operating costs, intense competition, and a shortage of skilled manpower. These challenges have made it difficult for airlines to achieve sustained profitability and expand their operations.

The high operating costs of Indian airlines are primarily due to the high price of aviation turbine fuel (ATF). ATF accounts for nearly 40% of an airline's operating expenses, and India has one of the highest ATF prices in the world. This is due to a number of factors, including the high import duty on ATF and the government's decision to levy a Goods and Services Tax (GST) on the fuel.

Another major challenge faced by Indian airlines is the intense competition in the market. There are currently seven major airlines in India, and they are all vying for a share of the same market. This competition has led to a number of fare wars, which have further eroded the profitability of airlines.

Finally, Indian airlines are also facing a shortage of skilled manpower. This is due to a number of factors, including the rapid growth of the aviation sector and the lack of investment in training programs. The shortage of skilled manpower has made it difficult for airlines to maintain their aircraft and operate their flights efficiently.

The challenges faced by Indian airlines are impacting the growth of the aviation sector. Despite the government's focus on the sector, the growth is not being realized to its full potential. In order to achieve sustained growth, the government needs to address the challenges faced by airlines and create an environment that is conducive to their expansion.

Change the game of trade as Trump returns to US throne

The return of Donald Trump to the US political scene is sure to have a major impact on the country's trade policy. Trump has been a vocal critic of the World Trade Organization (WTO), and he has threatened to withdraw the US from the organization. He has also imposed tariffs on a number of Chinese goods, and he has threatened to impose further tariffs if China does not agree to his demands.

Trump's trade policies are likely to have a significant impact on India. India is a major beneficiary of the WTO, and it would be harmed if the US were to withdraw from the organization. India is also a major exporter of goods to the US, and it would be affected by any tariffs that the US might impose.

The Trump administration has already taken a number of steps that could harm India's trade interests. In 2018, the administration announced that it would end preferential trade treatment for India under the Generalized System of Preferences (GSP) program. The administration has also imposed tariffs on Indian steel and aluminum exports.

These measures have already had a negative impact on India's trade with the US. In the first half of 2019, India's exports to the US fell by 10%. If the Trump administration continues to take steps that harm India's trade interests, it could lead to a further decline in exports and a slowdown in economic growth.

However, there are also some opportunities for India in the Trump era. The administration has shown an interest in negotiating bilateral trade deals with other countries, and India could be a potential partner for such a deal. The administration is also interested in reducing the US trade deficit with other countries, and India could benefit from any steps that the administration takes to achieve this goal.

Overall, the return of Donald Trump to the US political scene is likely to have both positive and negative consequences for India. The government will need to tread carefully and work to minimize the negative impact of Trump's policies while maximizing the opportunities that they might present.

Income tax payers' wishlist: More benefits in new tax regime, higher HRA & more

The new income tax regime was introduced in Budget 2020, and it offers lower tax rates than the old regime. However, the new regime also comes with fewer deductions and exemptions. As a result, many taxpayers are still opting for the old regime.

In order to make the new regime more attractive, the government should consider offering more benefits to taxpayers who choose it. For example, the government could increase the standard deduction or the HRA exemption in the new regime. The government could also offer a tax credit for taxpayers who invest in certain types of assets, such as real estate or equity-linked savings schemes (ELSS).

Another way to make the new regime more attractive would be to reduce the tax rates further. The current tax rates in the new regime are still higher than the rates in many other countries. By reducing the tax rates, the government could make India a more attractive destination for investment and create more jobs.

Finally, the government