Budget Could Take UDAN and the Indian Aviation Industry to New Heights

The Indian aviation industry has seen tremendous growth in the last few years and it is expected to continue in the coming financial year. The government’s ambitious UDAN (Ude Desh ka Aam Nagrik) scheme has seen major success in connecting cities across the country and operationalizing 70 airports, with 453 routes having already been started. The Ministry of Civil Aviation received an allocation of Rs 10,667 crore in the last Budget and Industry expects that the upcoming Budget will adequately address the demand of the aviation sector.

The government has set a target to operationalize 1,000 UDAN routes during the currency of the scheme and to revive and develop 100 unserved and underserved airports, heliports, and water aerodromes by 2024. This will help increase the number of airports in the country, which has nearly doubled from 74 in 2014 to over 141 in 2022. In-principle approval has been accorded for setting up 21 Greenfield Airports across the country and many of them have already been operationalized.

The industry expects the upcoming Budget to provide a thrust to the UDAN scheme and help more airports to take off. It also needs favorable measures in terms of taxation, with one of the recurring demands from the industry players being the rationalization of duties on ATF and/or bringing it under the purview of the goods and services tax (GST). The government’s measures also need to be directed towards attracting more tourists by developing more iconic tourist destinations and expanding the visa-on-arrival scheme/e-visas to more countries. Furthermore, the government could incentivize the maintenance repair overhaul (MRO) industry in line with the government’s increasing thrust on Make in India.