Flying Through The Roof

The ATF price was hiked only in 2000 by 48%. Just one per cent hike in ATF amounts to an additional expenditure of over Rs 13 crore.

This issue was the main point of discussion at a recent meeting of the Parliamentary Consultative Committee. A major price component is government taxes in the form of excise and sales tax on ATF. While excise duty is uniform at 16%, sales tax varies from state to state. Though the national average is about 25%, in states like Kerala and Gujarat, sales tax on ATF is as high as 39.10 and 36% respectively.

Thanks to Chandrababu Naidu’s pragmatism, Andhra Pradesh has already set a precedence by slashing sales tax on ATF from 30.55% to just four per cent in April this year. Subsequently, fuelling by IA from Andhra airports has increased by almost 50 % and is likely to go up further.

While sales tax is applicable to both domestic and international flights for IA and AI, foreign carriers pay no sales tax on ATF. Naturally, it results in a substantial cost disadvantage for national carriers vis-a-vis foreign operators on international routes affecting competitiveness. The impact of withdrawal of excise duty on the central government won’t exceed Rs 200 crore per annum. Similarly, if we categorise ATF as ‘‘declared goods’’ under the Central Sales Tax Act, it will cap sales tax to just 4 per cent. Some state governments may have reservations about this, but sales tax collection on ATF is only a minor percentage of their total collection. The Civil Aviation officials needs to sort this out with the Finance Ministry.

Permanent Vacation

THE Government has been sitting on the recommendations of the Second Labour Commission far quite some time now. In its report, the commission recommended, among other things, an immediate reduction of public holidays. Productivity has always been very low in the government sector and too many holidays don’t make things better. On a number of occasions, holidays are even manipulated to precede or follow weekends. Janmashtami is the most recent example; the same thing happened with Id not so long ago.

Compared to other developed nations, we already enjoy an embarrassingly high number of holidays and such tricks to stall government functioning for three days is inexcusable. It’s about time the Government did something to improve the work culture of its employees.

The Labour Commission’s recommendation to check multiplicity of trade unions will be another welcome move towards minimising industrial unrest caused by inter-union rivalry. Legislation relating to conditions at the workplace and in the unorganised sector is also overdue.

The Centre should also implement the commission’s recommendation of notifying a national floor level minimum wage. While state governments should be given the power to fix the minimum wage in respective states, the Centre should ensure that the wages they fix are not less than the national minimum notified.

Hotel Heartbreak

FIVE more ITDC hotels are in the process being divested. While Delhi’s Hotel Samrat will be given on a lease-cum-management basis, four other Ashok hotels in Bhubaneswar, Jammu, Patna and Jaipur will be sold to private players. Consultation is on with the respective state governments for divestment of another seven joint venture properties of the Indian Tourism Development Corporation (ITDC).

Already, 19 hotels across the country have been disinvested since November 2001. As I have pointed out in this column in the past, a number of them were sold at less than even their land value. This time, the Government should take adequate care during the evaluation process. Room occupancy records should not dominate the pricing formula and the market value of land and constructed properties must be meticulously taken into consideration.

Union Disinvestment Minister Arun Shourie’s sincere attempts have already invited opposition from different quarters. He can surely do without any more unnecessary controversies.

Crowding Out Modi

IF BJP General Secretary Arun Jaitley is to be believed, the only politician who drew crowds equal to Narendra Modi in Gujarat was RJD leader Laloo Prasad Yadav. According to him, if the Congress had used Laloo for more than three days, it would have made a great deal of difference. Modi is also said to have attracted larger crowds than L K Advani or other national leaders.

(The columnist is a Rajya Sabha MP)