Tuesday, November 29, 2022

Divestments must be win-win for everyone.'

‘Divestments must be win-win for all’


Jyotiraditya Scindia, minister of steel and civil aviation, describes himself as a facilitator who helps the Centre, states, and business achieve development as a common goal.He tells TOI in an interview that he is in talks with Maharashtra and Delhi to lower the levy on aviation turbine fuel (ATF) and has managed to get 16 of the 28 states to move to a common VAT.Additionally, he asserts that every stakeholder's feedback will be taken into account when steel sector PSUs disinvest and monetise assets.Excerpts:

How will the industry be affected by the removal of export duties on steel, ore, and pellets?

We believe that prices should be set by the market because this is a deregulated industry.However, problems that arise when prices exceed certain thresholds have a cascading effect on the economy.Because finished steel is a primary product that provides food for the entire economy, reasonable pricing must be the norm.As steel prices reached a new high in May, the government imposed export duties.We will regain some of our export market in the coming months.It will expand slowly.The steel market is going through a very quiet period all over the world. Because there isn't enough demand, prices for raw materials and finished steel have fallen.The only bright spot is India.As a result of the government's ambitious capex plan and exports, domestic prospects are bright.About 15% of the 121 million tonnes produced are exported.

What are the next steps for asset monetisation and disinvestment in steel PSUs in light of union concerns?

We have three to four candidates—RINL, Nagarnar, or various SAIL plants—on which we have made principled decisions.They are in different stages.A process of disinvestment is always changing.The Air India disinvestment was a success because it was an iterative process in which stakeholders' concerns were taken into consideration and the story was constructed.In the end, it must benefit everyone involved.Whether you're a union, a state government, an investor, or the Indian government, our ultimate goal is the same: this company needs to be a going concern that helps build the country.The path must be chosen if everyone is in agreement.

Why was the Indian carrier wide-body wet lease policy modified?

The vast majority of planes remained parked on the ground for two and a half years (Covid time) with few passengers.The sector suddenly transformed from a starved state into a frenetic one, with revenge travel taking place all over the world—something that hadn't happened in at least 20-30 years.Previously grounded planes can no longer fly enough now.There is no inventory of (new) planes.Aircraft manufacturers had, understandably, slowed down their pipelines in anticipation of a drop in demand when suddenly we experienced a flood (globally).We are caught in an exceptionally unusual circumstance where we have air terminals and carriers that need to fly all the more however we can't get an adequate number of planes.We relaxed the wet lease environment to provide the necessary connectivity as a temporary arrangement until airlines receive their fleets in accordance with their aircraft orders.I have always advocated for Indian carriers to acquire more wide-body aircraft so that we can provide international point-to-point connectivity rather than having our hubs in neighboring nations.The fleet-acquisition programs of Air India, IndiGo, and Vistara are very strong and healthy.This serves as a temporary solution for other airlines until they receive their aircraft.Until our airlines acquire their aircraft through dry leasing or purchase, it will offer a promising growth path in the short term.

The tax rates on ATF at India's busiest airports, Delhi and Mumbai, remain high.What steps are being taken to ease the load?

By lowering ATF taxes, sixteen states have joined the movement.We currently have 28 states charging 1-4% on ATF, out of 36.There are now eight states.With those eight states, that is my pursuit.Delhi and Mumbai are the two biggest options in that basket.Hopefully, they will comprehend the multiplier effects of lowering tax rates and decide whether they want a larger portion of a smaller pie or a smaller portion of a larger pie. This is my sincere appeal.Refueling and connectivity both benefit from multiplier effects.Numerous states with lower ATF taxes are reaping the benefits of this.In the event that 28 states are charging somewhere in the range of 1% and 4%, and eight states charging somewhere in the range of 20% and 30%, then you as an aircraft know where to refuel from.In the past, airlines had no choice.You have a choice today.In terms of tax cuts, the sooner they get on board, the better it will be for them to keep their share of the refueling market.

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