As India becomes a large domestic and international aviation market, there is a need to create rupee based aircraft leasing industry. Substantiate.(200 Words)
Refer - Financial Express
Enrich the answer from various sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· As the world’s third largest domestic aviation market, the time is ripe for India to enter into aircraft financing and leasing activities from Indian shores.
· This is critical to the development of a self-reliant aviation industry, creating aspirational jobs in aviation finance, besides leveraging the business opportunities available in India’s financial Special Economic Zones (SEZs), namely, International Financial Services Centre (IFSC).
· The announcement of this policy statement in the Budget follows the release of the ‘Rupee Raftaar’ report at the Global Aviation Summit in Mumbai.
· For Ireland, this industry creates jobs not only in the financial services sector but also in aircraft MRO, asset management, ancillary products, etc. The aircraft leasing sector directly employs around 1,500 people with an average salary of EUR 165,000 (~Rs 1.2 crore) a year.
· There are another 3,500 indirect jobs and a whole host of jobs and incomes in the associated industries. The sector is estimated to contribute $660 million to the Irish economy.
· Most Indian carriers rely on leasing their planes: more than three-fourths of planes of airlines in India (with the exception of Air India) are leased. These leases are typically for six years and are denominated in USD.
· Annual lease rentals of around Rs 10,000 crore is sent to lessors based out of India, accounting for ~15% of the total revenues of the India-based airlines (except Air India). As the growth in Indian aviation continues, this total outflow is expected to triple in the next decade or so.
· New accounting standards (Ind-AS 116), requires that even the operational leases (as opposed to only finance leases earlier) need to be capitalised in the books of the airlines.
Building an India-based rupee leasing industry
Creating a rupee-based leasing industry will address many objectives:
· high-skill job creation in financing and across the value chain,
· retaining economic value in India,
· offering local savers a new investment class,
· creating a product more-suited to the needs and requirements of the local industry.
Krish 5 years
Kindly review sir,Thank u
IAS Parliament 5 years
Try to include about raaftar report, Indian accounting standard. Keep writing.
K. V. A 5 years
Pls review
IAS Parliament 5 years
Try to include about raaftar report, try to provide data, include about Indian accounting standard about airlines. Keep writing.
Anu 5 years
Kindly review. Thank you
IAS Parliament 5 years
Good attempt. Try to include about maintanence and repair organisations. Keep Writing.
Mirudula Parthibarajan 5 years
Kindly review my answer.thanks in advance
IAS Parliament 5 years
Good attempt. Try to include about the absence of Maintanence and repair organisation (MRO). Keep Writing
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