The budgetary allocation for the regional connectivity scheme UDAN (Ude Desh Ka Aam Nagrik) has been slashed by 60% after a record-high grant last time. The fund is spent on reviving unused and underused airports in tier-2 and tier-3 cities.
The government has set aside ₹502 crore for the scheme compared with the previous Budget Estimate (BE) of ₹1,244 crore, which was also the highest-ever allocation for the scheme since its launch in 2017.
The allocation in the Interim Budget marks a 40% drop from the Revised Estimate (RE) of ₹850 crore for this fiscal year.
Union Finance Minister Nirmala Sitharaman in her Budget speech on Thursday said that the number of airports in the country had doubled to 149 since 2014, and that “expansion of existing airports and development of new airports will continue expeditiously” at a time Indian airlines have placed an order of more than 1,000 aircraft. However, this was not supported by allocation in the Budget.
As a whole, the Civil Aviation Ministry was allocated ₹2,300 crore, which is a 26% drop from the previous year’s Budget Estimates.
Also read: Three new economic corridors for railways, says Finance Minister in speech
Traditionally, the largest chunk of allocation for the aviation sector has gone to Air India, which continues even after its privatisation though to a much-smaller extent, with ₹1,158 crore set aside for the airline as the government has to service the interest on some of the remaining debt.
A debt of ₹29,464 crore was hived off from the airline at the time of disinvestment and parked in a special purpose vehicle, Air India Assets Holding Ltd, along with real estate assets. A part of this debt has since been cleared.
A sum of ₹57 crore has been set aside for the production-linked incentive scheme for drones and drone components, compared with ₹33 crore in this fiscal’s BE and RE.
