At the same time, investments in the five-year Senior Citizens Savings Scheme has been retained at 8.3%. The interest rate on the senior citizens’ scheme is paid quarterly.

Budget airlines IndiGo, SpiceJet, GoAir and AirAsia are set to significantly expand their respective fleet sizes.Along with other carriers, the total number of aircraft to be inducted by the domestic players would be more than 900.With an existing fleet of 150 planes, IndiGo is readying to add another 448 aircraft — 399 A320s and 49 ATRs — in the next seven to eight years. Competitor SpiceJet too is in the process of expanding its current fleet of 57 aircraft.

“Demand incentives or cash subsidies can at best be a short-term measure to kick-start the process. However, tax rebates and other fiscal and non-fiscal measures can be sustained over a longer term and will have a greater impact and outreach,” the paper said.