The Ministry of Civil Aviation (MoCA) is taking decisive steps to tackle India's growing aircraft shortage by enhancing access to bank credit for leasing operations and simplifying the No Objection Certificate (NOC) process for aviation infrastructure. These measures aim to support the rapidly expanding Indian aviation sector, where over 85% of the current fleet is leased.
Boosting Aircraft Financing and Leasing
A High Level Committee (HLC), chaired by Aviation Minister Ram Mohan Naidu, recently convened to address the bottlenecks in aircraft availability. The committee is tasked with exploring mechanisms to allocate more bank credit to the aviation sector and identify potential joint ventures for technical and skill development in aircraft leasing.
Discussions during the HLC meeting focused on creating a more favorable environment for aircraft leasing and financing. Key topics included the feasibility of rupee-denominated financing, achieving greater clarity on the applicability of the General Anti-Avoidance Rule (GAAR), and potentially renegotiating the Double Taxation Avoidance Agreement (DTAA) framework with Ireland, a major global leasing hub.
The Ministry emphasized that aircraft leasing is a well-established and commercially viable business. Risks associated with the sector are being progressively mitigated through appropriate legal and regulatory frameworks, aiming for a predictable policy landscape in India.
Streamlining Infrastructure Approvals
In parallel, the MoCA also held a separate meeting dedicated to streamlining the No Objection Certificate (NOC) system. This system is crucial for builders and other stakeholders involved in aviation-related infrastructure projects. With India's airport infrastructure expanding rapidly—a new airport becoming operational every 45 days—efficient approval processes are vital.
Officials have been instructed to formulate a comprehensive plan for a new, more efficient NOC system within the next 15 days. This initiative seeks to accelerate development and remove administrative hurdles that could impede the sector's growth.
Stakeholder Engagement
The HLC meeting saw participation from senior officials across various government bodies, including MoCA Secretary Samir Kumar Sinha, representatives from the Ministry of Finance, the Department of Commerce, the Directorate General of Civil Aviation (DGCA), the Reserve Bank of India (RBI), and the International Financial Services Centres Authority (IFSCA). Industry associations also contributed to the discussions, highlighting the collaborative approach to strengthening India’s aviation ecosystem.