Monday, 27 June, 2022
HomeIndiaGovernanceBudget cuts to civil aviation ministry 'unreasonable', House panel recommends adding funds

Budget cuts to civil aviation ministry ‘unreasonable’, House panel recommends adding funds

Standing Committee says reduced budgetary allocation a matter of grave concern, calls on govt to inject ministry with more funds to boost sector, revenue.

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New Delhi: A parliamentary panel has expressed “grave concern” over the “significant shortfall” in the budget allocated to the civil aviation ministry in the 2021-22 fiscal, considering that the sector was among the worst affected by the Covid pandemic last year.

The standing committee on Transport, Tourism and Culture headed by Rajya Sabha BJP MP T.G. Venkatesh, has recommended that a high fund be allocated to the ministry at the Revised Estimate (RE) 2021-2022 stage so as to give the needed push to India’s aviation sector.

In its report tabled Wednesday, the committee noted that “it is unreasonable that instead of giving an enhanced budgetary allocation, there has been a significant shortfall in the BE 2021-22 allocation of the Ministry. This surely is a matter of grave concern.”

The report also highlighted how the Rs 3,224.67 crore allotted to the civil aviation ministry was a 14 per cent drop from Rs 3,758.72 crore, the ministry’s projected requirement.

The aviation industry faced one of the most testing times in 2020 owing to the several changes that were put in place in view of the rapidly spreading coronavirus, from a complete halt of scheduled international flights for almost a year to restrictions on domestic travel.


Also read: More staff, planes & routes: Vistara, SpiceJet, IndiGo are slowly rebuilding their air ‘power’


Rs 915 cr allocated for all schemes, demand was Rs 1,358.85 cr

The ministry had projected a requirement of Rs 1,358.85 crore, excluding a Rs 2,268.99 crore allocation for Air India Asset Holding Limited (SPV). The ministry, however, received Rs 915.16 crore for all schemes under the revenue section, such as Regional Connectivity Scheme (more popularly known as ‘Udan’) and Airports Authority of India’s Hollongi project in Arunachal Pradesh.

The Civil Aviation Secretariat, which acts as an industry facilitation body, was allotted Rs 44.83 crore as opposed to the projected Rs 66.13 crore, while the Udan scheme received Rs 600 crore as opposed to the Rs 806.05 crore that was sought.

The Aircraft Accident Investigation Bureau also received Rs 5.01 crore, lower than the Rs 17.64 crore that was projected. Similar reductions were noted in the budgetary allocations for the Directorate General of Civil Aviation, Bureau of Civil Aviation Security and Indira Gandhi Rashtriya Udan Akademi among other bodies.

The standing committee’s report underlined that while the reason for a reduced budget has not been given, “the requirement for additional funds will be taken up at the Revised Estimates stage”.

Aviation secretary Pradeep Singh Kharola, in his deposition before the standing committee, noted that 70 per cent of the budget allocation is directed towards Air India Asset Holding Limited, 19 per cent to the development of airports under the flagship Regional Connectivity Scheme and air connectivity in the Northeastern region, while the remaining 11 per cent is “distributed among Ministry (Main) and its attached & autonomous bodies for their salary, Capital and Revenue expenditure”.

India’s air cargo grows by 8.24% since 2013-2014

The report also addressed how domestic cargo handling grew by 8.24 per cent between the financial year 2013-2014 and 2019-2020.

“Strong resilience was shown by India’s air cargo sector despite severe challenges posed by the pandemic and an increase in dedicated freight aircraft was registered from 6 (as on September, 2018) to 25,” the report noted.

Since the Covid-induced lockdown, 150 passenger aircrafts were converted and deployed for cargo purposes, with a focus on medical, pharma and agri-produce.

Noting India’s potential in the air cargo market, the committee called for the undertaking of a “dynamic policy and structural changes in the air cargo sector, in order to ensure that there is a much desired boom in this sector”.

The ministry should also aim towards transparency and a paperless trade environment in this sector, the report added.

(Edited Manasa Mohan)


Also read: Covid passports emerge as key for aviation industry to restart international travel


 

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