Madhya Pradesh: Sops Likely For Airlines Connecting Unserved Routes

Madhya Pradesh: Sops Likely For Airlines Connecting Unserved Routes

Reduction in VAT on fuel under consideration

Rajan RaikwarUpdated: Friday, July 04, 2025, 09:19 PM IST
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Madhya Pradesh: Sops Likely For Airlines Connecting Unserved Routes | Representative Image

Bhopal (Madhya Pradesh): The Madhya Pradesh government is mulling incentives for airlines that start flights from any state airport to hitherto unconnected parts of the country, Free Press has learnt. This incentive would be conditional — the flight should be operated to a city with no direct flight from the state.

For instance, there is no direct flight from Bhopal to Bhubaneswar. The airline choosing to provide the same would earn an incentive.

The government is also considering a similar incentive for international airlines along the same lines. A senior officer of the aviation department said on the condition of anonymity that for the service, domestic airlines are slated to get an incentive of up to ₹10 lakh, which could go up to ₹15 lakh for international airlines.

The department is deliberating upon the above while preparing the rules and regulations of the new Civil Aviation policy, which is likely to be issued within a week.

The Aviation department is also going to lure airlines by offering VAT reduction on Aviation Turbine Fuel (ATF). The government is thinking of reducing the current VAT of 4% on ATF to 1% if any plane does night parking at any airport in the state.

Sources in the Aviation Department said that the VAT rebate would help increase flights across the state. If an airplane parks at any airport at night, it will take off the next morning, offering another flight facility to passengers. Night parking will also boost the state economy as the crew will take rooms in hotels. Almost all the airports in the state have ATF facilities for refuelling.

Raja Bhoj Airport director Ramji Shrivastava said that he has yet to receive any guidelines from the state government regarding the reduction of VAT on ATF.

Notably, it was during the Global Investors’ Summit in Bhopal earlier this year that the state government unveiled the Aviation policy, whose rules and regulations are being worked on for implementation.

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