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Union Budget 2017: More airports in tier II cities

Mail Today Bureau     February 2, 2017

Seeking to make travel between tier-II cities faster, the centre has proposed developing airports in partnership with private players. As part of the regional connectivity plan, Finance Minister Arun Jaitley announced in the Budget that select airports will be developed and maintained under PPP mode.

"Airport Authority of India Act will be amended to enable effective monetisation of land assets. The resources, so raised, will be utilised for airport upgradation," Jaitley said while presenting the budget. Experts said the boost to the aviation sector will be crucial for the growth of transport sector. This will also create competition among different modes of transport as it will also prove to be less time consuming. The Civil Aviation Ministry received a substantial increase of over 22 per cent in budgetary allocation at Rs 5,167.60 crore for the next financial year.

Out of the ministry's total allocation, a good chunk will be for Air India, which is to get Rs 1,800 crore. The amount will be extended to the national carrier as part of the bailout package announced by the then UPA government in 2012. Besides, the airline will be given Rs 508 crore as part of investment in public enterprises. National airports operator AAI has been allocated Rs 2,543 crore, apart from a budgetary support of Rs 100 crore.

Meanwhile, the budgetary funds for aviation watchdog DGCA has been stepped up significantly to Rs 230.56 crore for 2017- 18. The amount is at Rs 29.67 crore for the current fiscal. Significantly, UN aviation watchdog, International Civil Aviation Organisation (ICAO) is scheduled to audit India's air safety preparedness in the second half of this year.

The Bureau of Civil Aviation Security (BCAS), the country's apex aviation safety agency, has been allocated Rs 214.50 crore in the latest Budget. The government-owned airline has been allocated Rs 1,800 crore as part of the Rs 30,0231 crore financial bailout package. Air India had asked for Rs 2,844 crore as equity from the government for the fiscal year starting April 2017. The airline is surviving on a  Rs 30,231-crore bailout package extended by the previous UPA government in 2012, staggering over 10 years.


As part of this planned equity infusion, the carrier has so far received around Rs 24,000 crore from the government. Saddled with a debt of Rs 46,570 crore, including Rs 15,900 crore on account of aircraft acquisition, the carrier posted an operational profit of Rs 105 crore for the first time in a decade last fiscal. However, in the ongoing financial year, the airline has reported combined losses of over Rs 700 crore for April and September quarters.

Meanwhile, the government also allocated Rs 1,840.77 crore to the tourism ministry in the budget for the next fiscal, including Rs 959.91 crore for the Integrated Development of Tourist Circuits around specific themes (Swadesh Darshan scheme). The ministry would be receiving a little over Rs 250 crore more in the 2017-18 fiscal as compared to the ongoing financial year for which it was allocated  Rs 1,590.32 crore, according to the budget document.

Besides, another  Rs 100 crore have been allocated for Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD). Significantly, as much as  Rs 412 crore have been provided for promotion and publicity of tourism ministry's various programmes and schemes in the Union Budget.


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