Last Updated on February 3, 2024 by BFSLTeam BFSLTeam
India is witnessing remarkable growth in its aviation sector, as the number of operational airports in the country has doubled to 149 in the last decade. This was announced by Finance Minister Nirmala Sitharaman in her interim budget speech on February 1, 2024. She said that the government has invested heavily in developing airport infrastructure, connectivity, and regional air transport under various schemes such as UDAN, NABH Nirman, and Aatmanirbhar Bharat.
Achievements of the civil aviation ministry were highlighted, which include:
- Launching the world’s first fully biofuel-powered flight from Dehradun to Delhi in 2023.
- Introducing the Air Bubble arrangements with 28 countries to facilitate international travel amid the COVID-19 pandemic.
- Implementing the Krishi Udaan scheme to provide air cargo support to farmers and exporters.
- Establishing the first-ever seaplane service in Gujarat, connecting the Statue of Unity with Sabarmati Riverfront.
- Enhancing the passenger experience and safety through initiatives such as DigiYatra, e-Gate, and AirSewa.
New proposals for the aviation sector in the budget were announced, such as:
- Setting up a new airport in Leh, Ladakh, to boost tourism and connectivity in the region.
- Allocating Rs. 3,000 crore for the development of 21 greenfield airports and 78 heliports across the country.
- Providing tax incentives and concessions to promote the domestic manufacturing of aircraft, helicopters, drones, and related components.
- Creating a dedicated fund for the modernisation and upgradation of existing airports and air navigation systems.
- Forming a National Civil Aviation Policy to provide a roadmap for the sustainable and inclusive growth of the sector.
Challenges and Opportunities for the Aviation Sector in India
Despite the impressive growth and potential of the aviation sector in India, it also faces several challenges and risks that need to be addressed and overcome. Some of the major challenges are:
- High operating costs: Fuel, taxes, airport charges, maintenance, and leasing expenses burden airlines, making India one of the most expensive countries for aviation operations.
- Infrastructure constraints: Inadequate and congested airport infrastructure limits capacity and operational efficiency, requiring a USD 45 billion investment by 2030 for significant expansion.
- Regulatory hurdles: Complex and inconsistent regulations, including FDI limits, RDG, ASA, and taxation, create uncertainty for industry players.
- Environmental impact: Aviation contributes to environmental degradation and climate change through GHG emissions and noise pollution, accounting for 1.5% of India’s total GHG emissions in 2021 according to MoEFCC.
India’s aviation sector faces challenges, but it also boasts significant opportunities:
- Rising demand: With increasing population, urbanisation, and income levels, India is poised to become the third-largest aviation market globally by 2024, with 520 million passengers annually.
- Technological innovation: Embracing digital technologies could generate USD 30 billion in value for the Indian aviation sector by 2030.
- Government support: Various initiatives like NCAP, UDAN, NABH Nirman, and Aatmanirbhar Bharat aim to provide incentives, subsidies, and infrastructure to bolster the industry.
- Regional connectivity: India’s vast network of airstrips and airports presents ample room for expansion and improved connectivity, particularly in remote areas.
Summing Up
In conclusion, the budget for 2024 signals the government’s dedication to positioning India as a premier global aviation hub post-COVID. Notably, the emphasis on promoting green and sustainable aviation underscores a forward-looking approach crucial for the sector’s long-term viability. With the backing and direction provided by the budget for 2024, India’s aviation industry is primed to soar to unprecedented heights.
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