Aviation need US$15trn investment over 10-15 years

The Government is re-aligning its schemes and is making lots of investments to leverage humongous opportunities in the leasing industry, a top official said at an ASSOCHAM event held in New Delhi 4 May 2018.

“There will be opportunities for PPP (public private partnership), we are working on it, we can bring investments, you can just come up with small bit of investments, we can set up an infrastructure, let it be given on lease,” said Ram Mohan Mishra, additional secretary in Ministry for Micro, Small and Medium Enterprises (MSMEs) while inaugurating an ASSOCHAM Global Summit on “Leasing, Hire Purchase & Consumer Credit”.

“Depending on the appetite of medium enterprises, we would like to invest along with you in the micro and small enterprises, so their capabilities are at a par with you and it is a pleasure for you to carry them along with you, this is the foundation of inclusive growth,” said Mishra.

He added that there are so many government infrastructure lying unused or not being used fully. “We can aggregate them, and warehouses, cold storages and everything, all those can be given on lease to somebody, it is possible.”

He further said that there is huge demand countrywide for power tiller, tractors and various such equipments in the farm sector which provides major opportunity for leasing industry as though farmers can get working capital from MFIs (micro finance institutions) but there is lack of term loans.

“There is a need for improvement in the way we finance businesses for sure and this is where leasing can be a path-breaking input,” said Mishra.

Earlier, in her address at the ASSOCHAM conference, Vandana Aggarwal, economic adviser in Civil Aviation Ministry said that the ministry is trying to put in place a financing structure, the regulatory, policy environment, the entire finance ecosystem which could work.

“Now is the time to set even the lease terms and may be rest of the sectors can piggy bank on the aviation growth and we can together make a big force before the government to get some of the regulatory issues sorted out,” said Aggarwal.

Adding that with about 30 per cent decline in export credits as a route to procure aircrafts in value, she said that Civil Aviation Ministry would also be looking at direct loans. “This is something that the aviation sector has been indicating to us.”

Aggarwal also said that civil aviation sector is looking for strong financial support from banks, lessors, private equity or any other form of financial intermediation as the demand for growth in the sector is to be met through US$15 trillion worth of investments in the next 10-15 years.

She further said that the Government looks forward to creating a lease asset management entity in India which could be a partner with domestic airlines in procuring aircrafts from overseas and equally how individual transactions could be creatively crafted so that it’s a win-win not only for the leasing entity but India at large. fii-news.com