The Indian Government has reduced the annual budget for aviation sector by more than half to almost $380 million, mainly due to reduced liabilities of Air India following its privatization, but the funds for regional connectivity scheme UDAN was considerable increased.
The budget for last year was $1.3 billion.
In 2022, around INR 92 billion had gone to Air India Asset Holdings Limited (AIAHL), a special purpose vehicle (SPV), to handle the loans and debts for the financial restructuring of Air India. This year, the amount for AIAHL was reduced significantly to $135 million with the privatization of the carrier.
Meanwhile the UDAN scheme’s allocation was doubled to $151 million from last year’s $73 million.
Going ahead, the Finance Minister of India stressed the importance of expanding the reach of aviation in India and announced that fifty additional airports, heliports, water aerodromes, and advanced landing grounds will be revived for improving regional air connectivity.
The Directorate General of Civil Aviation (DGCA) was allocated $9 million while the Bureau of Civil Aviation Security (BCAS) gained $37 million in the Union Budget.
India's Economic Survey 2022-23 also painted a positive picture of the country's aviation industry, noting that it has great potential owing to growing demand from the middle class, growth in population and tourism, higher disposable incomes, favourable demographics, and greater penetration of aviation infrastructure.