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Kolkata: Civil aviation is one of the most important sectors of transportation in a developing and fast-growing economy such as India. As speed of travel assume increasing significance, civil aviation becomes more and more important. Headline numbers indicate India is the third largest aviation market in the world after the US and China. In 2025, about 25 crore passengers are supposed to have taken to the air and the sector is rising at an annual rate of 10%.
With finance minister Nirmala Sitharaman set to present the Union Budget on Sunday, Feb 1, it is important to have a look at what are the expectations from this crucial sector. Significantly, the civil aviation sector has been in the news for all the wrong reasons lately -- the severe disruptions of service of Indigo and before that the Ahmedabad air crash of Air India that took about 270 lives. Let's take a look at what the Budget recommendations of PWC for this crucial sector are.
A developed nation cannot be imagined without a developed aviation infrastructure. PWC thinks India needs a multi-pronged strategy that will incorporate building new airports, expanding metropolitan aviation hubs and modernising existing airports to support long-term economic growth. The act of modernizing existing airports can be undertaken through public–private partnerships (PPP), PWC said. The number of PPPs is expected to rise from 14 to 25 in the next couple of years in accordance with the National Monetisation Pipeline (NMP), the agency mentioned in its report.
The UDAN scheme will be further strengthened to ensure affordable and reliable air connectivity for all regions, with focused interventions for hilly, remote, and North-Eastern areas, promoting balanced regional development, said the consultancy major.
Aviation fuel costs are a significant cost of operating air service. PWC has said that efforts should be made to progressively bring aviation turbine fuel under the GST framework, to improve efficiency and competitiveness. It also mentioned that states have to be incentivised to VAT on ATF.
PWC said that the GIFT City can be strengthened as a global hub for aircraft leasing and financing. Alongside capabilities of domestic businesses in maintenance, repair and overhaul, and aerospace manufacturing have to be scaled up.
PWC mentioned a few more points which are significant. These range from enhancing global connectivity to deployment of AI-enabled air traffic management systems. "India will modernise bilateral air service agreements and develop its airports as globally competitive transit hubs, reinforcing the country’s position in the international aviation landscape," PWC mentioned in its report.
It also said, "A seamless digital air travel ecosystem will be created through the expansion of DigiYatra, deployment of AI-enabled air traffic management systems, and transition to end-to-end paperless processes." The management consultancy also mentioned the need to promote sustainable aviation fuels and development of carbon-neutral airports. The Directorate General of Civil Aviation’s (DGCA) regulatory and safety oversight in line with global best practices, PWC thinks.
