Finance Minister Nirmala Sitharaman in her interim budget speech on February 1, 2024 highlighted significant advancements in India’s aviation sector, including the expansion of airports to 149, introduction of 517 new air routes, and an anticipated increase to 1.3 crore flyers. Sitharaman also noted record aircraft orders exceeding 1,000, underscoring a decade of dynamic growth that has energized the aviation industry.
“The number of airports has doubled to 149, adding that Indian carriers have pro-actively placed orders for over 1,000 new aircraft,” Sitharaman said. “Roll out of air connectivity to tier-two and tier-three cities under UDAN scheme has been widespread. Five hundred and seventeen new routes are carrying 1.3 crore passengers,” the Finance Minister added.
Civil aviation ministry faced budget cut
However, it may be noted that the civil aviation ministry’s budgetary allocation was reduced to Rs 2,300 crore for the upcoming financial year, down from Rs 2,922.12 crore in the revised estimate for the current fiscal ending March 2024. According to documents from the interim Budget for 2024-25, this allocation included a revenue component of Rs 2,257.79 crore.
The Budget document also indicates reduced allocations for regulators DGCA (Directorate General of Civil Aviation) and BCAS (Bureau of Civil Aviation Security) in 2024-25. DGCA is allocated Rs 302.64 crore, while BCAS will receive Rs 89 crore. In contrast, the revised estimates for 2023-24 allocated Rs 397.55 crore for DGCA and Rs 100.02 crore for BCAS.
Finance Minister Nirmala Sitharaman presented the interim Budget, marking the final budget of the Modi government before the general elections.
60% cut in allocation for regional air connectivity scheme
The budget allocation for the regional connectivity scheme UDAN (Ude Desh Ka Aam Nagrik) was reduced by 60% from its previous record-high grant. This fund is dedicated to revitalizing unused and underused airports in tier-2 and tier-3 cities. The government has earmarked Rs 502 crore for the scheme in comparison to the previous Budget Estimate (BE) of Rs 1,244 crore, which was the highest-ever allocation since its inception in 2017.