Aviation Scheme

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Modi government's flagship aviation scheme is facing a fund crisis as the number participating airlines have increased manifold. While the government's initial assessment for the scheme was Rs 300 crore, a manifold rise in the number of participating airlines has increased the requirement to Rs 1,200 crore.Bid proposals for 502 routes have been received by the government in second round as compared to 128 routes in the first round of bidding. Bidding process for second round is has been completed on 21 December, but the Ministry of Civil Aviation has not awarded the routes as it is running short of money to pay Viability Gap Funding (VGF) to the operators. In order, to attract airlines to fly routes in remote areas which may be commercially unviable, the government gives VGF besides offering concessions in airport parking charges. While the central government contributes 80 per cent of the VGF amount, while the remaining comes from the state governments concerned. For north-eastern ...