The ministry of civil aviation on Friday released a draft policy aimed at boosting regional connectivity and increasing air travel from 70 million to 200 million by 2022. The policy includes tax incentives for airlines to fly to smaller towns and eases the norms for domestic carriers to operate international services, reported IANS. The ministry recommended a cap of Rs 2500 per hour on fares for travel between smaller cities. The shortfall would be made up by levying a 2% cess on all flights, it said.

The government also suggested hiking Foreign Direct Investment in domestic airlines to over 50% if the open skies policy is implemented, under which overseas airlines can operate an unlimited number of flights to and from India. At present, the FDI limit is 49%.

The ministry proposed the replacement of the 5/20 rule with a system of domestic flying credits, but also left the options of retaining or abolishing the regulation altogether. The 5/20 rule disallows airlines that don’t have five years of flying experience or 20 aircraft from flying overseas.

The draft policy will be put up for feedback and inputs from stakeholders for three weeks.