New Delhi: India has one of the lowest and "most competitive" airfares in the world despite high cost of planes and fuel, Union Minister Jayant Sinha said today.
"These are the two most important costs for an airline. Our taxes are also quite high," said the Minister of State for Civil Aviation.
"But when you look at pricing in India, as far as Indian airlines are concerned, I can assure you that we are among the lowest and most competitive air fares in the world," he added.
In efforts to make air travel more affordable as well as connect unserved and under-served airports, the government has come out with the regional connectivity scheme. Under the scheme -- UDAN (Ude Desh Ka Aam Naagrik) -- fares are capped at Rs 2,500 for one-hour flights.
"Our effort is to provide air services at an affordable cost and the regional connectivity scheme UDAN is aimed at that only," Sinha said.
At an event organised by All India Management Association (AIMA), Sinha said the country's economy is delivering high quality products and services at very affordable prices for the consumers.
"We are frugal economy because we are poor country... So we have to deliver product and services at price points which are affordable. This forces us to really think about affordability and cost management at all the time," he noted.
In terms of purchasing power parity, India's GDP is around USD 8 trillion while it is about USD 18 trillion for both the US and China. According to Sinha, India is growing at 7-8 per cent while the US is expanding at 2.5 per cent and in the case of China the growth rate is pegged at 6 per cent.
"It effectively means that the contribution that the Indian economy is going to make in the next decade in terms of relative contribution of growth rate of the US economy, is 180 per cent," he noted.
Further, he said that India's contribution to global GDP growth in PPP terms in the next decade would be almost twice what the US is going to add.
"...it is 60 per cent of China, which is still going to be larger. But we are 60 per cent of China, which is a much larger piece of USD 18 trillion," he added....