New Delhi, Dec 4 (IANS): Civil Aviation Minister Ashok Gajapathi Raju said Thursday the current business environment is tough for doing aviation business in India and that the current regulations are not helping the sector.

"Existing regulations are not helping the Indian aviation sector. We are focusing on removing some of the bottle necks that are affecting the sector," Gajapathi Raju said here.

The minister was speaking at a ceremony in which Air India and National Buildings Construction Corporation (NBCC) entered into an agreement for monetisation of the airlines' surplus land assets.

The minister further said that the current taxation on fuel and regulations that limit airline operations have hampered the growth of the sector.

"We have to focus on removing bottle necks for the sector and make it sustainable again," Raju said, adding that the latest news about the losses made by budget carrier SpiceJet was like getting a 'heart attack'.

The minister further said that sector has suffered with the closure of Kingfisher Airlines and that financial health of other airlines was also not well right now.

Meanwhile, the minister added the current memorandum of understanding (MoU) will help Air India in monetisation at least 106 land assets identified by the airline to raise Rs.5,000 crore over the next 10 years.

The monetisation of land and other assets was part of the airlines' turnaround and financial restructuring plan. The yearly target for garnering funds through monetisation process is pegged at Rs.500 crore.

"We should make some (financial) improvements from this MoU in some time," Gajapathi Raju said on the impact that the monetisation process will have on the airline's finances.

Housing and Urban Poverty Alleviation Minister M. Venkaiah Naidu, under whose ministry NBCC functions, said that out of box ideas are required for the turnaround of Air India.

"The government is discussing what to do about loss-making PSUs. We need to do something about PSUs incurring losses for decades," Naidu said at the event.

Air India, on its part, said the MoU for monetisation of its surplus land assets is a non-binding, non-exclusive agreement and each land asset will be individually evaluated for a particular mode of monetisation process in a revenue-sharing mode.

The development assumes significance as Air India has an accumulated debt burden of Rs.40,000 crore. Such measures are expected to bring in more revenue to the airlines making it less dependent on the government for bailout funds

The airline has currently received a fresh equity infusion of Rs.5,000 crore in the interim budget for 2014-15.

The cash-strapped carrier will be provided around Rs.20,000 crore till 2020-2021 to turn around its operational and financial performance.