Civil aviation and steel minister Jyotiraditya Scindia describes himself as a facilitator to help business, states and the Centre achieve the common objective of development. In an interview, he tells TOI that without implementing he has managed to get 16 of the 28 states to move to a common VAT on aviation turbine fuel (ATF) and is in talks with Maharashtra and Delhi to lower the levy. He also says disinvestment and asset monetisation of steel sector PSUs will incorporate every stakeholder’s feedback. Excerpts:
How will lifting of export duty on steel items as well as ore and pellets impact the industry?
This is a sector that is deregulated, we believe in the market setting the price. However, when there are issues regarding prices going beyond certain norms, it has a cascading impact on the economy. Rational pricing must be the norm as finished steel is a primary product that feeds the whole economy. In May, the government had imposed export duty as steel prices had reached a new high. Over the next few months, we will regain some of our export market. It will be a slow growth. Internationally, the steel market is going through a very subdued phase, raw material and finished steel prices have fallen as demand is not there. The only silver lining is India. Domestically, the prospects are bright, powered by the government’s large capex plan, and exports are the top-up. Of the 121-milliontonne production, roughly 15% is the export content.
Given the concerns of unions, what is the road ahead for asset monetisation and disinvestment in the steel PSUs?
We have three-four candidates — RINL, Nagarnar or in various SAIL plants — decisions on all of them, on a principle basis, have been taken. They are at various stages. A disinvestment process is an evolving one. The reason why the Air India disinvestment was a success was because it was an iterative process, where you constantly kept your eyes and ears open, you were taking on board the concerns of stakeholders and crafting the story. Ultimately, it must be a winwin for all stakeholders. Whether you are a union, a state government, an investor or the government of India, all of us have only the ultimate objective that this concern must be a going concern and must contribute to nation building. If we all agree then, we have to find the path.
Why was the wide-body wet lease policy for Indian carriers amended?
Fortwo-and-a-half years (Covid time), a vast majority of planes were parked on ground with hardly any passengers. Suddenly from this starved scenario, the sector flipped into a frenzied scenario with revenge travel happening all across the world — something not witnessed at least in the last 20-30 years. Planes that were once grounded can’t fly enough now. There is no supply of (new) planes. Understandably, aircraft majors had slowed down their pipelines thinking there would be a slackness in demand while suddenly we had a flood (globally). We are stuck in a very strange situation where we have airports and airlines that want to fly more but we can’t obtain enough planes. As a stopgap arrangement in the interim of airlines getting their fleet (according to their aircraft orders), we relaxed the wet lease environment to provide the required connectivity. I have always pushed for more wide-body aircraft with Indian carriers so that we can provide point-to-point (international) connectivity as opposed to having our hubs in neighbouring countries. Air India, IndiGo and Vistara have very strong and healthy fleet-acquisition programmes. Other airlines are looking at this as a stopgap till the time they receive their aircraft. It will provide a good avenue for growth in the immediate term until our airlines get their aircraft on dry lease or on purchase.
India’s busiest airports at Delhi and Mumbai continue with high tax rates on ATF. What is being done to reduce the burden?
Sixteen states have come on board by reducing taxes on ATF. Today out of 36 states, we have 28 charging 1-4% on ATF. You are left with eight states. It is my pursuit with those eight states. The twobiggies in that basket are Delhi and Mumbai. It is my fervent appeal and hopefully they will understand the multiplier effects of lowering tax rates in terms of whether they want a larger chunk of a smaller pie or a smaller chunk of a larger pie. There are multiplier effects, both in terms of refuelling and connectivity. This is being reaped by a lot of states where tax on ATF has fallen. If 28 states are charging between 1% and 4%, and eight states charging between 20% and 30%, then you as an airline know where to refuel from. Earlier, airlines didn’t have an option. Today you have an option. The sooner they get on board (in terms of cutting taxes), the better it will be for them in terms of maintaining their market share of refuelling.
How will lifting of export duty on steel items as well as ore and pellets impact the industry?
This is a sector that is deregulated, we believe in the market setting the price. However, when there are issues regarding prices going beyond certain norms, it has a cascading impact on the economy. Rational pricing must be the norm as finished steel is a primary product that feeds the whole economy. In May, the government had imposed export duty as steel prices had reached a new high. Over the next few months, we will regain some of our export market. It will be a slow growth. Internationally, the steel market is going through a very subdued phase, raw material and finished steel prices have fallen as demand is not there. The only silver lining is India. Domestically, the prospects are bright, powered by the government’s large capex plan, and exports are the top-up. Of the 121-milliontonne production, roughly 15% is the export content.
Given the concerns of unions, what is the road ahead for asset monetisation and disinvestment in the steel PSUs?
We have three-four candidates — RINL, Nagarnar or in various SAIL plants — decisions on all of them, on a principle basis, have been taken. They are at various stages. A disinvestment process is an evolving one. The reason why the Air India disinvestment was a success was because it was an iterative process, where you constantly kept your eyes and ears open, you were taking on board the concerns of stakeholders and crafting the story. Ultimately, it must be a winwin for all stakeholders. Whether you are a union, a state government, an investor or the government of India, all of us have only the ultimate objective that this concern must be a going concern and must contribute to nation building. If we all agree then, we have to find the path.
Why was the wide-body wet lease policy for Indian carriers amended?
Fortwo-and-a-half years (Covid time), a vast majority of planes were parked on ground with hardly any passengers. Suddenly from this starved scenario, the sector flipped into a frenzied scenario with revenge travel happening all across the world — something not witnessed at least in the last 20-30 years. Planes that were once grounded can’t fly enough now. There is no supply of (new) planes. Understandably, aircraft majors had slowed down their pipelines thinking there would be a slackness in demand while suddenly we had a flood (globally). We are stuck in a very strange situation where we have airports and airlines that want to fly more but we can’t obtain enough planes. As a stopgap arrangement in the interim of airlines getting their fleet (according to their aircraft orders), we relaxed the wet lease environment to provide the required connectivity. I have always pushed for more wide-body aircraft with Indian carriers so that we can provide point-to-point (international) connectivity as opposed to having our hubs in neighbouring countries. Air India, IndiGo and Vistara have very strong and healthy fleet-acquisition programmes. Other airlines are looking at this as a stopgap till the time they receive their aircraft. It will provide a good avenue for growth in the immediate term until our airlines get their aircraft on dry lease or on purchase.
India’s busiest airports at Delhi and Mumbai continue with high tax rates on ATF. What is being done to reduce the burden?
Sixteen states have come on board by reducing taxes on ATF. Today out of 36 states, we have 28 charging 1-4% on ATF. You are left with eight states. It is my pursuit with those eight states. The twobiggies in that basket are Delhi and Mumbai. It is my fervent appeal and hopefully they will understand the multiplier effects of lowering tax rates in terms of whether they want a larger chunk of a smaller pie or a smaller chunk of a larger pie. There are multiplier effects, both in terms of refuelling and connectivity. This is being reaped by a lot of states where tax on ATF has fallen. If 28 states are charging between 1% and 4%, and eight states charging between 20% and 30%, then you as an airline know where to refuel from. Earlier, airlines didn’t have an option. Today you have an option. The sooner they get on board (in terms of cutting taxes), the better it will be for them in terms of maintaining their market share of refuelling.
