Stating this at a meeting organised by the PHD Chamber of Commerce and Industry (Phdcci) on Thursday, he said the draft had been submitted to the government for modifications to include the new policy imperatives.

For involving private and foreign investors in the development of airport infrastructure, a key infrastructure development cell had been set up in the Airports Authority of India to process proposals in this regard.

The process of appointing consultants too had been initiated. Three airports had been identified in the first phase to attract foreign consortia, whereas indigenous parties have been invited to give their proposals to this cell for smaller airports.

The civil aviation sector had already been liberalised since the aim was to encourage private sector. The danger is that over-licensing of capacity could lead to chaos as happened inthe US market, said Kaw.

Budgetary support to aviation sector had been meagre, Kaw pointed out. During the Eighth Plan, civil aviation got just 1.3 per cent of its financial requirements from the government, while the remaining 98.7 per cent had to be raised from the market. The pricing policy of aviation turbine fuel, based on cross-subsidisation of kerosene, also caused a drain of nearly Rs 450 crore from the industry.

Even the taxes such as inland air travel tax and foreign travel tax, initially imposed for building aviation infrastructure, have been absorbed into the mainstream budget causing a loss of Rs 800 crore to the industry, Kaw said.