Indian aviation industry showing upward trend

The annual report card of the Indian economy that comes a day ahead of the Budget said the Air India handover, coupled with a boost to digital infrastructure and structural reforms in telecommunications would have a positive impact on the pace of recovery of the aviation sector.

The Indian aviation sector has started to rebound with accelerated pace of Covid-19 vaccine roll-out and easing of travel restrictions globally, stated the Economic Survey released this week.

As the first wave of the pandemic ebbed a calibrated approach was adopted to open the domestic airlines, introduction of air transport bubbles or air travel arrangements with specific countries also helped in boosting the aviation sector. "The domestic traffic in India has more than doubled from around 61 million in 2013-14 to around 137 million in 2019-20, registering a growth of over 14 percent per annum," said the Economic Survey released by the Centre.

The Union Budget has allocated Rs 10,667 crore for the civil aviation ministry for 2022-23. Out of the total allocation, Rs 600.7 crore has been earmarked for the regional connectivity scheme UDAN (Ude Desh ka Aam Naagrik), while Rs 9,259 crore goes to AI Asset Holdings Limited for servicing the loans transferred to the special purpose vehicle (SPV) for the financial restructuring of Air India.

An amount of Rs 165 crore has also been set aside for the medical benefits of retired Air India employees, the Budget document said. Other steps to boost the Indian aviation sector included disinvestment of Air India, privatisation, modernisation and expansion of airports, boost to the regional connectivity scheme – UDAN and incentivisation of maintenance, repair and overhaul (MROs) operations.

With the help of these supportive measures, India's aviation sector is on the path of gradual recovery from the turbulence caused by the Covid-19 pandemic, it stated. "With the accelerated pace of vaccine roll-out and easing of travel restrictions globally, Indian aviation sector has started to rebound," it noted. Despite the travel restrictions, the total passengers carried in October 2021 reached 99.58 lakhs, which was approximately 68 percent of the pre-Covid level of 146.25 lakh, the report mentioned.

Drone Shakti, a mission similar to those aimed at conserving water and building infrastructure, is another step to make India a drone hub by 2030. Experts said the initiative will help make India's drone sector a $5 billion market.

The budget's focus on drones comes in the backdrop of the government's efforts to make India a drone hub by 2030. The Union Cabinet approved a production-linked incentive scheme for domestic manufacture of drones and drone components in September. The proposed tenure of the scheme is three years starting in FY22. The Unmanned Aircraft Systems (UAS), also known as drones, offer tremendous benefits to almost all sectors of the economy and can become an important propeller for growth due to their reach, versatility, and ease of use, especially in India's remote and inaccessible areas.