Airlines urge government to cap GST rate at 15%
Airlines have asked the government to set the goods and services tax (GST) at 15% and retain existing tax exemptions to avoid fare hikes. GST, which aims to economically unify the country, will subsume most of the indirect taxes levied by the centre and the states including excise duty, service tax, value-added tax, entertainment tax and luxury tax. The tax is expected to be implemented next year. The current rate of service tax is 14% and adding Swachh Bharat Cess and Krishi Kalyan Cess, airlines pay 15% tax. “Under no circumstance should GST exceed 15%,” said an airline official, who did not wish to be named, referring to the submission made to the government last week. “It would hamper growth in the fastest growing aviation market in the world.” Airlines expect a 9-15% increase in airfares if the GST is set higher. A group of airline officials met state finance ministers and aviation ministry officials last week to convey the implications of the new regime to the sector. Most of India’s airlines have been making annual losses over the past few years and some are loaded with high debt. A plunge in fuel prices from a peak of $140 a barrel has seen some airlines report profits in the last fiscal. Fuel makes up of about 40% of their total cost. Cheaper fuel has allowed airlines to offer fares that are sometimes cheaper than railway fares in premium trains. Airlines have, therefore, also requested the government to exempt them from paying duty on fuel surcharge component of the airfare. Most airlines typically mention the amount of fuel surcharge on every ticket, which is part of the overall price. “This is based on the reason that duty has already been paid on ATF (aviation turbine fuel) and the same has not been allowed as credit. Hence, levying GST on that portion of fare will result in double taxation,” said another airline official, who too declined to be named. Airlines also want certain exemptions to continue. For example, they way want the current policy of no service tax on journey starting from or terminating in north-east and those from Jammu & Kashmir. They want a continuation of no service tax on payment of aircraft lease, import of aircraft, on aircraft parts and its repair and maintenance. They also don’t want new taxation on sale of passenger air miles and loyalty programmes as is being proposed under GST. Terrell McClain Authentic Jersey
Bidding for NHAI road assets to begin in October
From October, the government plans to start inviting bids to monetise its road assets worth Rs 70,000 crore. The aim is to unlock money that can used to build more roads. The transport ministry has lined up 100 high traction highways owned by the National Highways Authority of India (NHAI) to be leased out to private players through competitive bidding. The highway projects will be leased to private players for maintenance and toll collection for 30 years in exchange for an upfront payment. A NHAI estimate says the government can rake in Rs 70,000-Rs 75,000 crore over a certain period of time by leasing out its road assets. “We’ll initiate the bidding process next month. We are already getting queries from investors. The project list is being worked out,” said a senior transport ministry official, who did not want to be named. The official said several foreign investors, including Canadian pension fund PSP and investors led by CLSA (Credit Lyonnais Securities Asia), Goldman Sachs and Abu Dhabi Investment Authority (ADIA) have shown interest in investing in these projects along with local operations and maintenance partners. “All domestic and long-term financial institutions are quite bullish about investing in operating assets instead of putting their money in greenfield projects,” said Vinayak Chatterjee, chairman, Feedback Infra. Recently, Goldman Sachs invested $220 million in Essel Highways. Canada’s Brookfield Asset Management is also vying for road assets of Anil Ambani’s Reliance Infrastructure. Under the Road Transport and Highways Ministry’s policy, highways built by NHAI are awarded to private players for an upfront fee. The private party operates the highway stretch and collects tolls for a long-term period. Infra developers, PE firms and institutional investors can take up completed highway stretches. The proceeds from leasing out will be invested in capacity expansion, officials said. The ministry has set a target of constructing 15,000 km of national highways in FY16-17. Kent Hrbek Authentic Jersey
9 states stall push for full rural connectivity by 2019
Nine states seem to be holding back India’s race to achieve full rural connectivity by 2019 with Assam, Jammu & Kashmir and Jharkhand topping the list, according to a central government assessment. The fear is that the ambitious scheme may have to be pushed beyond 2019, a politically significant date as the Modi government will be up for re-election then, despite recent improvements having taken daily road construction to 130 km from the earlier average of around 85 km. Besides the three worst performers, a review of ‘Pradhan Mantri Gram Sadak Yojana’ (PMGSY) found progress wanting in Chhattisgarh, Bihar, Rajasthan, Odisha, Uttarakhand and West Bengal, prompting a concerned rural development ministry to begin meeting chief secretaries of these states to urge them to step up the pace of work. Some of the states, like J&K and Chhattisgarh, face obvious problems of terrain and terrorism. Development work in these states is a challenge and recurrent political turmoil in J&K makes the state even less effective. West Bengal is seen to lack admini strative efficiency while Odisha and Rajasthan have large backward areas. Bihar’s road construction has improved but PMGSY records reveal more needs to be done. The choice of 2019 to achieve full rural road connectivity is clearly linked to the political objective of presenting voters with a glowing report card ahead of Lok Sabha elections. While targets may have to be pushed forward owing to the drag of nine states, the question is if the Modi government will be able to do enough to make it count in its attempt to net the sprawling rural constituency . The 2019 time-frame is daunting. As per estimates, Assam will have to scale up the pace of work by 10 times to take the length of road constructed per day from 2.3 km to 22.5 km. Only if roads are constructed at a rate of 22.5 kmday over three years will Assam be able to connect all rural habitations by 2019. The chart of estimates drawn up for laggard states presents clear targets. Second on the list is J&K which has to take road construction from the present 1.3 km a day to 8 km; Jharkhand from 3.7 to 20.2; Odisha from 10.3 to 18.9; Uttarakhand from 3.3 to 7.7; West Bengal from 6.6 to 10 and Chhattisgarh from 5.1to 6.2. A senior official said, “The ministry has already met all states barring Bengal and J&K. We are urging them to raise the pace of work.There is no shortage of funds and there is no reason why states should not step up.” Noticing that hill states are among those lagging behind, the Centre has decided to rope in Border Roads Organisation in Assam, Uttarakhand, J&K and Arunachal Pradesh. Josh Robinson Jersey
Highway across nations: India approves $1-billion connectivity project
India has approved an ambitious $1.04-billion project for constructing and upgrading 558 km of roads to link it with Bangladesh, Bhutan and Nepal and ease the movement of passengers and cargo, as part of the larger effort to increase inter-regional trade by 60 per cent. The new project has been given an official nod by India’s Department of Economic Affairs with 50 per cent funding from the Asian Development Bank (ADB), officials told IANS, adding that the road project will cover West Bengal and Manipur on the Indian side, as of now. “The mandate is for completing the project within the next two years,” a senior official said. “The primary idea behind the Bangladesh-Bhutan-India-Nepal (BBIN) road initiative is to improve ground connectivity in the region,” said Leena Nandan, Joint Secretary, Ministry of Road Transport and Highways. “We have taken up five highway stretches in the country, which are very important for such a connectivity to succeed. This project is entirely different and new — and about to be rolled out,” Nandan told IANS. The project — as per a list accessed by IANS — includes, among others, an upgrade of the 122-km Siliguri-Mirik-Darjeeling ($15 million) and the widening of the 60-km National Highway-35 (Kolkata-Bangaon) on the border with Bangladesh ($130 million). It also includes a new 123-km road to connect with Diamond harbour, on the outskirts of Kolkata, at a cost of $250 million. All these are in West Bengal and will be entrusted to the state’s Public Works Department for execution, officials said. “This apart, two highways are going to come up in Manipur — 115-km Ukhrul-Tolloi-Tadubi ($230 million) and a 138-km split, four-lane road between the Kohima-Kedima Kring-Imphal section of National Highway-39 ($280 million),” said A.D. James, Deputy Secretary at the Ministry of Road Transport and Highways. “These two roads are to be executed by the National Highway Infrastructure Development Corp. They are currently in the DPR (detailed project report) stage,” James told IANS. Officials are also looking at the possibility of shorter routes. Apart from the works under the $1 billion project, a 600 metre bridge and a 110 km-road in the Impal-Moreh stretch of Manipur are also being planned under the broader BBIN road initiative. The Manila-based bank has agreed to fund up to 50 per cent of this project as well, officials said. The DPR for this is ready. Clearances are awaited from Nepal. “This bridge will connect Kakarbhitta in Nepal with Panitanki in West Bengal. Once we receive the necessary approvals, we would like to bid for the projects as early as possible, say by November-end,” said Anand Kumar, Managing Director, National Highways and Infrastructure Development Corp. The four South Asian nations, led by Road Transport and Highways Minister Nitin Gadkari from the Indian side, had signed a landmark Motor Vehicles Agreement in June last year in the Bhutan capital Thimpu to regulate passenger, personnel and cargo vehicular traffic among the South Asian neighbours. “This agreement between sub-grouping of four South Asian nations — Bangladesh, Bhutan, India and Nepal — will pave the way for seamless movement of people and goods across their borders for the benefit and integration of the region and its economic development,” Gadkari had said. A joint statement later said: “Taking note of the finding that transforming transport corridors into economic corridors could potentially increase intra-regional trade within South Asia by almost 60 per cent, and with the rest of the world by over 30 per cent.” As regards the funding, James said talks were simultaneously on with ADB to look beyond the committed 50 per cent. “There are chances that the bank may even fund up to 72 per cent of the total cost for the project. Then we will get around $700 million.” Zane Gonzalez Authentic Jersey
Air India plans to reach out to pilots who had quit
Air India plans to reverse poach senior pilots and commanders, who had switched to other Indian and foreign airlines earlier and on whom the state-run carrier had spent a lot of money to train them. As part of the strategy to hire over 500 pilots, the public sector carrier would also focus on hiring those who had left it in the past for various reasons and moved to other carriers, sources said. The move, which has the “consent” of Air India Chairman and managing Director Ashwani Lohani, is aimed at saving both money and time as these already trained pilots can be deployed for operations immediately, they said. Air India has already offered jobs to 13 pilots it had sacked for participating in a two-month strike in 2012, sources said, adding most of them were “considering” the proposal though three pilots are not willing. As many as 173 Air India pilots have resigned from the national carrier since 2012 till last year, with most of them being those operating the narrow-body Airbus A320 family of aircraft, as per official figures early this year. A recruitment drive to hire 534 A320 pilots is currently on. Air India also needs around 150 wide-body pilots to expand its international operations further, including planned flights to Washington and several European destinations. “We have immediate requirement of around 150 wide-body pilots, besides the over 500 pilots being hired for the A320s, for medium and long haul operations. If we take back those pilots who have left us in the past, we will not only be saving huge cost on training them but also save a lot of time which goes down in the induction process,” sources said. At present, the cost of training a pilot for an Airbus A320 family of planes stands a little over at Rs four lakh per pilot while the type rating cost per pilot comes to nearly Rs 23 lakh. While those who join the Dreamliner fleet from B-777 wide-body planes are imparted a 4-5 week training costing around Rs 25 lakh per pilot, pilots coming from the narrow- body planes (A320 family) are given a three-month training at a whopping cost of Rs 80 lakh per pilot, according to sources. “We have not been able to finalise the Washington and other proposed international flights because of shortage of B-777 and B-787 pilots only. If the plan to hire such pilots materialises, we can commence these destinations in a short time,” they said. Madrid, Barcelona, Copenhagen and Stockholm, besides Washington, are the destinations that Air India is looking at as part of its international expansion plans, Air India Director for Commercial Pankaj Shrivastava had said sometime back. Deryk Engelland Authentic Jersey
Maharashtra power company’ s 24-hour connection promise a ‘bluff’
Power consumers and activists have described the Maharashtra State Electricity Distribution Company Limited (MSEDCL)’s pledge of energy connections within 24 hours as an eyewash. “What energy minister Chandrakant Bawankule has promised is a lie. The listeners might be amazed with the announcement. But there is a hidden ‘if’ to the announcement and that is the pre-condition that the infrastructure is already in place. This is happening even today in city areas” said Vilas Deole, secretary of the Nashik Zilla Grahak Panchayat and a former MSEDCL employee. MSEDCL officers, however, are not ready for consumer activists’ theory. They do not have anything different to add to the announcement. “We release the connections for power on the same day an individual or a professional house pays for meter connection.” an officer said. Karl Joseph Authentic Jersey
IT-enabled power distribution to save Rs 10,000 crore annually
Government aims to save as much as Rs 10,000 crore annually by leveraging information technology to ramp up its power distribution network in urban towns by January 2019. Moving in this direction, the Power Ministry is likely to award the works to have IT-driven power distribution in as many as 2,636 towns across the country by December this year. The entire work will take at least two years after the award of works. “The detailed project report for making IT enabled power distribution system in 2,636 urban towns will be ready in two months. Power Ministry will be able to award the work by December this year. It will take two years to complete the task thereafter,” a senior official told PTI. The official further said: “This requires an investment of about Rs 1 crore in each town because the Centre with state governments have already created other required infrastructure like data and customer centres under the Restructured Accelerated Power Development and Reforms Programme (R-APDRP).” “As per our latest study, the estimated savings across 76 such towns with IT enabled power distribution system across 14 states was Rs 185 crore. If we extrapolate that to 1,226 towns which have gone live online, then it comes to around Rs 5,000 crore every year. Once all 4,041 urban towns will be linked online, the savings would be to the tune of Rs 10,000 crore annually,” the official added. R-APDRP had covered 1,405 urban towns in the country but out of these 1,226 were made to have IT enabled power distribution system. IT enabled power distribution systems helps discoms reducing aggregate technical and commercial (AT&C) losses. This aids them to monitor the feeders online. Besides IT driven power distribution system provides consumers a host of services like online bill payment, applying for new connection and knowing status of power supply situation in these towns in real time basis. As part of the project, as many as 48 engineers designated as Urban Vidyut Abhiyantas (UVAs) were roped in July this year to assist the discoms, facilitating better consumer connect and monitoring of Integrated Power Development Scheme (IPDS). Nick Leddy Womens Jersey
Smart grids reduce power generation shortfall
Computer-assisted smart power grids help reduce power generation shortfall, and result in improved delivery and more efficient billing, a study in Britain has concluded. “A smart grid is a complex modern electricity system which utilises sensors, monitoring, communications and automation, to improve the electricity system,” the researchers wrote in the study. “Smart grids fundamentally change the way in which we generate, distribute and monitor our electricity. They dramatically improve the efficiency, flexibility and reliability of the existing electricity infrastructure,” the researchers said. Carl Chalmers, Michael Mackay and Aine MacDermott of Liverpool John Moores University, in England, explained in their research, published in the International Journal of Smart Grid and Green Communications, the advantages of a smart grid over the traditional energy grid. They said smart grids use a vast interconnected infrastructure that allows two-way communication and automation throughout the entire grid — from generator to consumer and back — striking out the possibility of a malicious manipulation into the metering system for the sake of sabotage, criminal or online military/terrorist action. The researchers, however, suggested that after knowing the possible worst-case scenario with regard to the smart grid and smart meters, countries must put in place security measures to protect the infrastructure. The research team noted that critical infrastructures present a tempting target for terrorists, military strikes and hackers wanting to cause disruption, steal information or incapacitate a country remotely. Edinson Volquez Womens Jersey
States to Get Centre’s Financial Support for Free Power Scheme
The Centre will extend financial support to states to enable them to offer new electricity connections free of cost to everyone. At present, electricity connections to only below poverty line (BPL) families are offered for free. A senior government official said the Union power ministry has proposed to extend the free connections scheme to all in line with the Centre’s goal to achieve 24×7 power for all by March 2019. Rural Electrification Corporation (REC) is working on a scheme to provide long-term loans to states that agree to offer free new electricity connections. The scheme will be a key issue for discussion when Union power minister Piyush Goyal meets state power ministers during the two-day conference of power ministers starting October 7 in Gujarat. REC is working on a scheme for financing the power distribution companies so that they could release new electricity connections to households. The scheme covers funding of expenses like laying of lines to give access to electricity, installation of meters and other accessories. As per the plan, the distribution companies will have to get new connection plans approved by REC, which will reimburse expenses incurred by power utilities in giving electricity access to households. “It will be an optional scheme for the states. Some states may not see merit in providing free power connections to remote areas that are not connected to the electricity grid. We would encourage such states to at least offer electricity connections on easy monthly instalments of as low as 100 per month for 4-5 years,” the government official said. The Centre has shifted focus to 100% household electrification in all states from the rural electrification programme where a village is declared electrified if 10% of households and all public places have electricity access. It has asked all states to assess the number of unelectrified households and cost estimate for creating the necessary infrastructure to provide the electricity access. As per preliminary estimates, there are 5.98 crore unelectrified households in India. The government targets to provide access to electricity connections to all Indian citizens by December 2018, while it aims to make power available 24*7 to all by March 2019, ahead of the earlier target of March 2022. Sebastian Janikowski Jersey
In a turnabout, Karnataka electrified with surplus power
Reeling under severe shortage of power until a few months ago, Karnataka is all of a sudden left with the bounty of surplus power. The surplus generation has left the energy department in a dilemma of whether to make arrangements for purchase of power to cope with the summer crisis or manage with its own. On Friday, power generation in the state was augmented after Karnataka Power Corporation Limited (KPCL) successfully commissioned the third unit of Ballari Thermal Power Plant (BTPS) at Kuditini in Ballari. It can generate 700 Mw of power, and has been billed as the only generating unit owned by the state with such a huge capacity. Now all three units of BTPS are capable of generating about 35-40 million units of energy per day. Energy minister DK Shivakumar told Bangalore Mirror that the commissioning of the unit, though delayed by several months, was a major milestone for the department. “The unit alone is capable of generating 700 Mw. At this stage, the state is surplus with power and we are hopeful of overcoming the power crisis this summer.” Addressing media persons in Ballari, G Kumar Naik, MD, KPCL said, “The unit had raised expectations due to its huge generation capacity. At the time of the trial, the unit clocked a generation of 711 Mw of power.” The required coal for the third unit will be supplied from West Bengal. The state has allocated 2.34 TMC of water from the nearby Narayanpur dam for the unit. Leo Komarov Womens Jersey