Budget 2024: Airport expansion, development to continue, says FM Sitharaman

Finance minister Nirmala Sitharaman emphasized in her interim budget speech of 2024-25 on Thursday that the government would continue to work on airport infrastructure development going forward. She also outlined steps taken to boost air connectivity in non-metro areas of the country and ease international air trade.

“Expansion of existing airports and development of new airports will continue expeditiously,” Sitharaman said in her address.

“The aviation sector has been galvanized in the past 10 years. The number of airports has doubled to 149. Rollout of air connectivity to Tier II, III cities under Ude Desh ka Aam Naagrik (UDAN) scheme has been widespread as 517 new routes are carrying 1.3 crore passengers,” she pointed out.

The government had launched UDAN, a regional connectivity scheme, in Oct 2016 to provide affordable air connectivity to cities to regional and remote parts of the country.

“The Indian carriers have proactively placed orders of over 1,000 new aircraft,” she added.

"Expansion of existing airports and the development of new airports along with the extension of UDAN scheme for regional connectivity would remain an area of key focus aiding tourism and development," said Siddharth Tandon, partner--Indirect Tax, BDO India.

Since 2023, Indian carriers have been at the forefront of the global aviation ecosystem by placing massive orders of aircraft. In Feb 2023, the Tata Group-backed Air India placed an order of 470 aircraft including 400 narrow-body aircraft and 70 wide-body aircraft.

In June 2023, India’s largest airline IndiGo placed an order for 500 narrow-body aircraft at the Paris Air Show, thus taking its total orderbook to over 900 aircraft. India’s youngest airline Akasa Air stole the limelight in 2024 with an order of 150 aircraft, which was announced at the Wings air show in Hyderabad last month.

The finance minister also highlighted the facilitation of air cargo over the past four years. “We have taken a number of steps in customs to facilitate international trade,” she said. “As a result, the import release time has declined by 28% to 44 hours at air cargo complexes over the last four years since 2019.”

Cargo release time is defined as the time taken from the arrival of the cargo at the Customs station to its out-of-charge for domestic clearance in case of imports.