Union Budget 2025: Aviation Sector Reliant on Budget for Revitalization

The Indian aviation sector is currently facing significant challenges, including poor infrastructure, security lapses, and an over-reliance on overseas services. These factors are impacting operational efficiency and hindering overall growth. A recent report by ICRA projects that the industry will incur substantial losses in the coming financial years, primarily due to ongoing supply chain disruptions and engine issues.

Given this backdrop, Budget 2025 presents a crucial opportunity to revitalize the sector. To address these persistent challenges, the government must prioritize strategic investments, implement crucial policy reforms, and incentivize domestic manufacturing under the "Make in India" initiative.

India, with a population exceeding 1.4 billion, possesses a significant demand for air travel. However, the country currently lags behind in terms of airport infrastructure, with only 149 airports serving a vast population. This inadequate infrastructure, coupled with outdated facilities at many existing airports, creates bottlenecks and hinders efficient air travel. Furthermore, the UDAN scheme, aimed at enhancing regional connectivity, has not achieved its full potential due to insufficient funding and operational challenges faced by regional airlines.

To address these issues, the government must prioritize the development of new airports and the modernization of existing ones. This includes improving runways, enhancing passenger amenities, and upgrading air traffic control systems. Additionally, revitalizing the UDAN scheme by increasing funding and addressing the challenges faced by regional airlines is crucial for enhancing regional connectivity.

Furthermore, the government should implement policies that reduce operational costs for airlines, such as potentially including Aviation Turbine Fuel under the GST. Incentivizing domestic manufacturing of aircraft components, ground support equipment, and avionics through the "Make in India" initiative is also crucial to reduce reliance on foreign suppliers and enhance self-reliance.

By addressing these critical issues, Budget 2025 can play a crucial role in revitalizing the Indian aviation sector, enhancing connectivity, and ensuring its sustainable growth.