Aviation superpower in the waiting

The civil aviation industry has welcomed recent decisions such as 49 per cent FDI limit for global airlines, direct import of aviation turbine fuel, opening up bilaterals to domestic airlines, ECB for working capital loans and removal of import duties for spares.

Volatile crude oil prices, ATF taxes, rupee devaluation and high interest rates continue to hurt. Excessive taxes on maintenance, repair and overhaul have pushed business out of India with the collateral loss of jobs, revenue and government taxes. Air cargo and general aviation are lagging. The concept of retrospective taxation has created concern.

For aviation to thrive, India has to be regarded as an attractive destination for business and tourism. An inter-ministerial group needs to be set up to address that. Taxes on ATF, air tickets and MRO need to be rationalised. Aerospace manufacturing, smaller airports and aviation training need to be supported.

India is an aviation superpower waiting to happen. But a lot remains to be done.

XBRL story so far...

The Ministry of Corporate Affairs notified the revised Schedule VI applicable to Indian companies for the financial statements to be prepared for the financial year commencing on or after April 1, 2011. In line with the above change, a draft XBRL taxonomy for the Commercial and Industrial companies has been developed by the Institute of Chartered Accountants of India. This new taxonomy will be used for filing annual financial statements for the year ended March 2012 and onwards.

XBRL makes the financial statements machine-readable with the help of two documents — taxonomy and instance document. Taxonomy defines the reported elements and their relationships based on the regulatory requirements. Using the taxonomy prescribed, companies need to map their financial statements, and generate a valid XBRL instance document.

After a set of financial statements is converted into an XBRL instance document, it becomes machine readable and can be quickly compared and analysed with several other similar XBRL instance documents

Several companies have already completed the process of XBRL reporting for the year ended March 2011. Many companies struggled to meet the deadlines for filing in the previous year and, to avoid similar pitfalls, companies should examine the modifications needed for their existing software platforms and the training of their teams to be able to comply with the revised Schedule VI and XBRL reporting requirements.

New defence offset policy on the anvil

The stage is set for the announcement of the revised Defence Offset Policy 2012. While six countries out of the world's top 10 spenders on defence are scaling back their defence expenditure, India is looking to increase its spend in the near future. From the defence industry's point of view, India presents an interesting opportunity as it is the world's second largest importer of arms and tenth in terms of military expenditure.

The offset policy has undergone many revisions since then to increase its relevance and introduce efficiencies in the application of funds for carrying out an offset obligation. These revisions have been triggered largely by its limited success and have led to steadily widening criteria for carrying out an offset. The planned introduction of multipliers would help in directing the benefits of the offset policy, with more focus on development of indigenous defence capabilities. The increased focus on development of high-end technology equipment can surely help improve the country's self-reliance in manufacturing complex equipment, in place of the low-end technology products and services manufactured currently.

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