The growth projections for air passenger traffic suggest an additional requirement of 30 functional airports over the next five years and 180 in the next decade, according to Planning Commission estimates.

The passenger terminal capacity in all airports, expected to be 230-240 million this year, is likely to grow to 370 million, according to the estimates, drawn up in accordance with the investment plans of the airport operators.

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While five private airports at Delhi, Mumbai, Hyderabad, Bangalore and Cochin handle 60 per cent of air traffic, state-run Airports Authority of India (AAI), which used to cater to the entire sector, now handles the rest.

As per estimates, the plan body has received from AAI and the industry, Indian airports would require a significant investment of about Rs 67,500 crore (Rs 675 billion) during the 12th Plan period (2012-2017), of which around Rs 50,000 crore (Rs 500 billion) is likely to be from the private sector.

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Noting these projections, the Planning Commission has suggested that support from the state governments to develop airports was "vital" as it would generate trade and tourism opportunities in the respective states.

A working group of the plan panel on the civil aviation sector has also suggested that there was "a greater need to come up with a 'no frills' airport model without compromising on safety and security".

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In a bid to encourage and facilitate airport development, it has recommended, among other things, exemptions on income tax and service tax for developers.

"There is a need for the government and the industry to work together and bring down airfares in order to make air travel affordable for middle class population, without at the same time affecting the viability of the airline operations in the country," the Planning Commission working group said.

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It recommended granting of infrastructure status and IT exemption to brown-field airport expansion business, benefits under schemes like 'Serve from India Scheme' and non-imposition of service tax on Airport Development Fees.

Noting that there was divergence of opinion between the Airports Economic Regulatory Authority (AERA) and the industry, it said there was a need for "a stable, transparent and predictable regulatory regime with a mechanism for time- bound resolution of issues to create a sense of certainty in the sector".

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The plan body also asked the government to support the efforts of Indian companies which were winning global bids for development and operation of international airports.

Observing that a large number of institutional clearances were required for airports, it said facilitation by the government was an absolute necessary.

In this context, it gave the example of a National Facilitation Committee, headed by the Cabinet Secretary, that played a key role in the development of Terminal 3 at the IGI Airport in Delhi.