16 July 2024 : PIB Summary For UPSC

1. Tizu Zunki River to be harnessed for Economic Development of Nagaland, to enable Cargo & Passenger Transport: Shri Sarbananda Sonowal

(Source – https://pib.gov.in/PressReleseDetail.aspx?PRID=2033481 )

Topic: GS3 – Indian Economy – Infrastructure

Context

The government announced initiatives to develop Nagaland’s waterways, including Tizu Zunki River (NW 101) and Doyang River Lake, to boost tourism and connectivity. Youth are encouraged to train in maritime skills, with IWAI providing technical assistance for navigation and infrastructure development.

Analysis of the news:

• Union Minister Sarbananda Sonowal and Chief Minister Neiphiu Rio announced initiatives to enhance Nagaland’s waterways at a Stakeholder’s Conference in Dimapur.
• Plans include developing the Tizu Zunki River (National Waterway 101) with a feasibility study for navigation by IWAI and Nagaland’s Transport Department.
• The development of Doyang River Lake will feature community jetties and potential Ro Pax ferries to boost tourism.
• IWAI will provide technical assistance for NW 101 development, focusing on navigation aids, fairway development, and minimal infrastructure needs.
• The initiatives aim to improve inter-regional connectivity in Northeast India via waterways, enhancing economic, sustainable, and efficient transportation.
• Youth are encouraged to train in maritime skills at the Maritime Skill Development Centre for employment opportunities in the marine sector.
• The Ministry of Ports, Shipping & Waterways is working on multiple projects, including the Kaladaan Multimodal Transit Transport Project and linking NWs with the Indo-Bangladesh Protocol Route.

2. “India Aims to Become Leading Aviation Hub with $4 Billion MRO Industry by 2030” – Union Minister Shri Rammohan Naidu

(Source – https://pib.gov.in/PressReleseDetail.aspx?PRID=2033474 )

Topic: GS3 – Indian Economy – Infrastructure

Context

Union Civil Aviation Minister Kinjrapu Rammohan Naidu implemented a uniform 5% IGST rate on aircraft parts from July 15, 2024, aiming to boost India’s Maintenance, Repair, and Overhaul (MRO) industry and achieve global aviation hub status. This decision simplifies tax structures, resolves previous disparities, and supports PM Modi’s Atma Nirbhar Bharat vision.

Analysis of the news:

• Union Civil Aviation Minister Kinjrapu Rammohan Naidu announced a uniform 5% IGST on all aircraft and aircraft engine parts, effective 15th July 2024.
• The policy aims to boost the domestic Maintenance, Repair, and Overhaul (MRO) industry and establish India as a global aviation hub.
• Previously, varying GST rates on aircraft components led to challenges like an inverted duty structure and GST accumulation in MRO accounts.
• The new uniform rate simplifies the tax structure, eliminates disparities, and fosters growth in the MRO sector.
• The policy change aligns with the government’s Atma Nirbhar Bharat initiative, emphasising self-reliance and domestic industry growth.
• The uniform IGST rate was recommended by the GST Council in its 53rd meeting on 22nd June 2024.
• The policy aims to reduce operational costs, resolve tax credit issues, and attract investment in the MRO industry.
• The Indian MRO industry is projected to become a $4 billion industry by 2030, driving innovation and sustainable growth.
• The Ministry of Civil Aviation is confident this move will enhance the competitiveness of the Indian MRO sector.

MRO Industry in India:

Challenges: Tax Structure: Previous GST rates (5%, 12%, 18%, 28%) created complexities and an inverted duty structure. Infrastructure: Limited infrastructure and high operational costs hinder industry expansion. Skill Development: Shortage of skilled workforce in advanced MRO technologies. Regulatory Framework: Inconsistent regulations and bureaucratic hurdles. Investment: Limited domestic and foreign investment in MRO facilities. Way Forward: Uniform Taxation: Implementing a uniform 5% IGST rate simplifies tax structures, reducing operational costs and enhancing competitiveness. Infrastructure Development: Invest in modern MRO facilities and improve connectivity. Skill Enhancement: Establish training programs and partnerships with educational institutions for specialised skills. Regulatory Reforms: Streamline regulations and create a conducive business environment. Promote Investment: Incentivize domestic and foreign investments in MRO infrastructure.

Practice Question:  Discuss the recent policy measures undertaken by the Indian government to enhance the Maintenance, Repair, and Overhaul (MRO) industry, and evaluate their potential impact on India’s aspiration to become a global aviation hub. (150 Words /10 marks)