What the budget 2020 holds for Indian aviation

As the finance minister presented the Budget this Saturday expectations were that there would be some announcements related to aviation. This because of sections on the economic survey and also the fact that last year’s budget speech had laid out a vision towards India entering the aircraft financing and leasing market; the divestment of Air India; consideration for re-examining foreign direct investment into Indian airlines; policy interventions towards energizing Maintenance Repair and Overhaul (MRO); and promotion of the UDAN scheme.

But the budget this time simply flew by aviation as a topic. There was a casual mention of the UDAN scheme with a modification called Krishi Udan geared towards farmers and the ability to move produce. Details on this are pending. Also announced was the building of 100 more airports till 2024 but presumably, these are regional airports which do not quite address industry airport capacity challenge. Again details are pending. Surprisingly, Air India did not find any mention in spite of an allocation of 2205 crores for the special purpose vehicle.

Overall the budget allocates INR 3797 crores for aviation which includes funding the Ministry of Civil Aviation, DGCA, BCAS, AERA and the commissioner of railway safety.

On the projects side, there are allocations for the regional connectivity scheme (RCS), the purchase of two aircraft from Air India for VIP flights and the allocation for the Air India Asset Holdings Company. Indira Gandhi Rashtriya Udaan Academy and Pawan Hans also were allocated minimal amounts.

Overall, given the tax revenue deficit and declining economic output, one may argue that even if there was an intent it was not practical to announce any items in the budget. Yet for a budget focused so on infrastructure and development, one would have hoped that aviation got more traction.

Budget 2020 as far as aviation is concerned failed to takeoff.

About Satyendra Pandey

Satyendra Pandey is an India market expert and has held a variety of roles across aviation. An author and a certified pilot, his most recent book is titled: Dissonant dispatches: Indian aviation’s emergent flightpath.

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