india: Civil Aviation Budget for 2024-25 Sees a Cut, Prioritizes Air India and Drone Initiatives

New Delhi,India: In a significant development, the budgetary allocation for the civil aviation ministry has been reduced to Rs 2,300 crore for the upcoming financial year, down from the revised estimate of Rs 2,922.12 crore for the current fiscal ending March 2024.

As outlined in the documents of the interim Budget for 2024-25, the civil aviation ministry is set to receive an allocation of Rs 2,300 crore, which includes a revenue component of Rs 2,257.79 crore. Notably, Air India Asset Holding Ltd (AIAHL) will receive a higher allocation of Rs 1,158.79 crore in the next fiscal, up from Rs 713.92 crore allocated for 2023-24. This increase is attributed to the provision for servicing loans transferred to AIAHL as part of the financial restructuring of Air India.

AIAHL, a special purpose vehicle established by the government to manage Air India's assets, plays a crucial role in this financial arrangement.

The Budget document also reveals a boost in the allocation for the Production-Linked Incentive (PLI) Scheme for Drone and Drone Components, with the figure rising to Rs 57 crore for 2024-25, compared to Rs 33 crore in the current fiscal.

However, there are reductions in the budgetary allocation for regulators, namely the Directorate General of Civil Aviation (DGCA) and the Bureau of Civil Aviation Security (BCAS) for 2024-25. The DGCA is earmarked to receive Rs 302.64 crore, while BCAS is allocated Rs 89 crore. In the revised Budget estimate for 2023-24, the allocations for DGCA and BCAS were Rs 397.55 crore and Rs 100.02 crore, respectively.

Finance Minister Nirmala Sitharaman presented the interim Budget, marking the final budget of the Modi government before the general polls. The allocation adjustments reflect a strategic focus on Air India's financial restructuring, drone initiatives, and regulator funding amidst broader budget considerations.