Budget 2020: Aims at improving connectivity through regional flights, airports

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NEW DELHI: The Union Budget aims to improve regional air connectivity in the country with announcements on building 100 airports for regional flights and launch of airlines for farmers under the regional connectivity scheme.

In the Budget speech, finance minister Nirmala Sitharaman announced that the aviation ministry would launch a flight scheme to help farmers ferry their produce on flights.

“KrishiUdaan will be launched by the Ministry of Civil Aviation on international and national routes. This will immensely help improve value realisation especially in North-East and tribal districts,” Sitharaman announced in the Budget today.

This scheme of subsidised international and domestic flights will be an extension of the Ude Desh ke Aam Nagrik (UDAN) scheme that entails providing subsidised flights for Rs 2,500 per hour of flight. For these flights, the government subsidises the cost of operations and also provides other incentives too like no landing and parking charges and low tax on fuel.

She also added that the government will add 100 new airports to aid the regional connectivity scheme by 2024.

“Air traffic has been growing rapidly in the country as compared to global average. One hundred more airports would be developed by 2024 to support Udaan scheme. It is expected that the air fleet number shall go up from the present 600 to 1200 during this time. I propose to provide about Rs 1.70 lakh crore for transport Infrastructure in 2020-21,” She announced.

India currently has 100 operational airports and have a total of 450 airstrips in the country. About 350 of them are not operational. The government’s plan to make 100 airports operational in the next four years seems ambitious.

Analysts says that the plans looks nice but implementation will be key. “A good plan but where is the money coming from for these projects – both airline and airports. Who subsidises these flights for farmers? Also, upgrading 100 airports in the next four years seems a little aggressive and would be difficult to achieve,” said Mark Martin, CEO and co-founder at Martin Consultancy, an aviation consultancy firm.

The upgrade plan for UDAN airports is to be implemented by the Airports Authority of India (AAI) but the allocations for the airport operator in the Budget is not enough to meet the cost of upgrade.

The government has allocated Rs 465 crore under the Regional Connectivity Scheme in the budget for FY21. Under the RCS fund, money has been allocated for revival of 50 airports and viability gap funding for Northeast connectivity.

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