In a bid to promote industry and tourism in North Eastern states, the government will provide Rs 175 crore (Rs 1.75 billion) to Indian Airlines arm Alliance Air during 2002-07 for running additional flights to the region.

The Cabinet Committee on Economic Affairs, headed by Prime Minister Atal Bihari Vajpayee, in a meeting on Saturday approved the allocation of Rs 35 crore (Rs 350 million) per annum for five years to Alliance Air.

The funds would be provided from the North Eastern Council Budget while Alliance Air would spend the remaining Rs 15 crore (Rs 150 million) from its own resources during the Tenth Plan period.

Alliance Air would operate four 50-seater ATR-42-320 aircrafts exclusively in Assam, Manipur, Mizoram, Nagaland, Tripura and Meghalaya, an official spokesperson said.

The stations that would be air-linked through the scheme are Aizwal, Agartala, Dimapur, Guwahati, Imphal, Lilabari, Silchar and Shillong.

"Additional air services will ensure greater regularity and reliability of connectivity, increase in frequency of services and more non-stop flights, better connections and more convenient timings for passengers," he said.

The total costs of ATR lease would result in a negative cash flow of about Rs 38 crore (Rs 380 million) for Alliance Air, of which government would subsidise Rs 35 crore (Rs 350 million).

The Tenth Plan of North Eastern Council has emphasized the need for improving inter-state connectivity by road and air and provided Rs 1447.32 crore (Rs 14.47 billion) for the transport and communication sectors.