Post Budget Analysis | Aviation

<span style="font-weight: bold;">Proposals</span><br />
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<li>Expansion of airport capacity by five times, thereby facilitating one billion trips a year.</li>
<li>Development of 10 prominent tourist sites into iconic tourist destinations.</li></ul><br />
<span style="font-weight: bold;">Impact: Marginally Positive</span><br />
The Budget has reiterated the focus on improving regional connectivity through the UDAN scheme. The focus on expansion of airport capacity will help address the constraints faced by airlines with the current airport infrastructure, improve connectivity and thus boost tourism. Along with measures being undertaken to develop iconic tourist destinations to promote tourism, this effort will support the growth of the Indian aviation industry. While the Budget proposes to make the railways more competitive through measures like modernisation and improved passenger convenience, it should not have any major impact on air passenger traffic. <br />
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<span style="font-weight: bold; font-size: 12pt;">Aviation Infrastructure</span><br />
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<span style="font-weight: bold; font-size: 10pt;">Proposals</span><br />
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Increase in airport capacity in the country by five times; the balance sheet of Airports Authority of India (AAI) to be leveraged to raise required resources.<br />
Increased planned outlay for the Ministry of Civil Aviation to Rs 4,086 crore in FY2018v19 from Rs 2,543 crore in FY2017v18, with focus on airports capacity enhancement.<br />
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<span style="font-weight: bold;">Impact: Positive</span><br />
The Budget has placed emphasis on developing airport infrastructure in the country, which is lagging behind robust growth in air traffic. The government’s plan to increase the capacity by five times is a positive development and is targeted to meet the future of air traffic growth in the country. The AAI is expected to play a greater role and increase the pace of infrastructure development. The Budget proposal of leveraging the AAI’s healthy balance sheet is expected to generate sizeable resources for the AAI to undertake required capacity enhancement initiatives.<br />