Saturday, March 11, 2017

Centre’s ambitious UDAN scheme is likely to give wings to aviation and allied sectors

In an interesting development, the Union Cabinet recently approved a plan to spend Rs 4,500 crore to develop and upgrade 50 under-served or un-served airports and airstrips in order to boosting regional air connectivity (RAC) scheme, called UDAN.
The UDAN is expected to be a ‘game-changer’ for the Indian aviation sector. With the implementation of the RAC scheme, UDAN, we may see many more operational airports in the country. At the same time, the cost of travel is likely to come down significantly. The Indian airline industry is on a structural growth path with growth in excess of 23 per cent over the past two years.

The ultimate aim of the government under the scheme is to make flying viable to tier II and III cities. This effort would not only support the aviation sector, but would also boost other sectors such as tourism and business. Besides these, it would further boost the economic development in these areas and would create job creation.

If data is to be believed, “as part of the UDAN scheme for regional aviation, 15 airports or airstrips would be revived during 2017-18 and 2018-19 each and 20 during 2019-20.” Moreover, the government has said in order to reduce the cost of operations, it would provide concessions in the form of reduced excise on VAT, service tax and flexibility in code sharing at airports under the regional connectivity scheme.
11/03/17 DK Aggarwal/Economic Times