If anybody ever believed that the Left was against hidden subsidies, it’s time to apologise. In Kerala, chief minister VS Achuthanandan, who holds the IT portfolio, is out to give a studied backward integration stretch to the IT/ITeS industry by spreading the red carpet for aviation infrastructure development.
The 84-year old CPI(M) leader, chairman of an airport (Cochin International Airport Ltd – CIAL), which is the second in the world’s airport profit-to-investment ratios, is also bullish about pushing flight connectivity. Achuthanandan was recently in talks with captains of the aviation industry to start more services, especially intra-state flights.
??After the $360-million Kochi SmartCity MoU with Dubai Tecom, at least two lakh IT/ITeS jobs are projected in Kerala in the next two years. Brushing up investor confidence for this would need better flight connectivity among cities for trained IT professionals,?? says Achuthanandan.
In a post-Onam gesture, the Left Democratic Front (LDF) government has opened initiatives for at least two aviation sector incentives. One, the state government could underwrite a fixed share of the seats, perhaps 30-40%, in the flights, which could be utilised by senior government officials during their duty calls. This would ensure a critical minimum load for plying new services using small aircraft.
Two, the tax on aviation turbine fuel in Kerala is now as high as 36%. For long, industry has been wanting to trim it to 12%. This time, the LDF government is in a mood to listen.
The aviation market-friendliness from the government has been so radiant that the first proposal for a regional airline came from a Kerala-based company, Emric Air. Unlike west and north Indian regional airline markets with airport capacity issues, the advantage for a south Indian player is that there are at least three new airports (Bangalore, Chennai and probably Kannur) in the pipeline.
Chennai-based Paramount Air has proposed to operate intra-state flights linking Thiruvananthapuram, Kochi and Kozhikode, provided the ground-handling charges in CIAL are also pared. If Kannur Airport also gets underway, Kerala will become the only state with four international airports. With the support of its 20-lakh NRIs, the three airports are said to clock the highest air traffic. ??Inadequate connectivity has often stood in the way of IT sector expansion in state. It would be a joy to see this blocks removed,?? says VK Mathews, a global aviation software solutions provider, based in Technopark, “but, it would be good, if it can be matched with good roads.?