Economic Survey: Bank credit to aviation declined 8.7% in November

The uncertain growth prospects in the global markets and uneven credit allocation to the transport sector led to a decline in credit to the aviation sector by 8.7% on year in November 2022, as per the Economic Survey 2022-2023 tabled in Parliament on Tuesday.

While the bank credit to aviation and shipping sector has declined on year in November 2022, it has risen for wholesale, retail trade and non-banking financial companies.

In the aviation sector, the Economic Survey pointed out that the demand for air travel recovered in the previous financial year ended March 2022, and the rebound has continued in the current financial year as well.

Despite a decline in air travel demand by 54% in FY2021, the containment of Covid-19 infections and the lifting of travel restrictions worldwide aided the rebound in air travel in FY2022, led by the domestic sector, the Economic Survey said.

“The current financial year has further shown a rebound, with both passenger and cargo movement close to the pre-Covid-19 levels. The total number of passengers carried in December 2022 stood at 150.1 lakh, which was 106.4 per cent of the pre-Covid level (average for 11 months from April 2019 to February 2020). During November 2022, total air cargo tonnage stood at 2.5 lakh MT, which is 89 per cent of the pre-Covid levels,” the Survey said.

The government’s focus is also on improving coordination among different ministries and stakeholders for increasing the efficiency and effectiveness of investments.

“While traditional infrastructure sectors such as roads and railways have received a renewed push in recent years, sectors such as inland water transport and civil aviation, which have significant untapped potential, are also being encouraged sufficiently,” the survey said.

The government has also increased the number of airports under Krishi Udan Scheme to 58. Krishi Udan Scheme was launched in August 2020 on international and national routes to assist farmers in transporting agricultural products so that it improves their value realisation. For facilitating and incentivising the movement of agricultural produce by air transportation, the Airports Authority of India provides a full waiver of Landing, Parking charges, Terminal Navigational Landing Charges and Route Navigation Facility Charges for Indian freighters and Passenger-to-Cargo Aircraft primarily.