As Budget 2024 approaches, the Indian aviation industry finds itself at a pivotal moment, poised for recovery and growth after enduring significant challenges, particularly exacerbated by the COVID-19 pandemic. Amidst this backdrop, stakeholders within the sector are eagerly anticipating policy measures that can alleviate burdens and foster a more conducive business environment.
Central to the industry’s wishlist are tax concessions and incentives aimed at reducing operational costs and enhancing competitiveness. At present, the Goods and Services Tax (GST) rate of 18% on air travel and related services weighs heavily on both airlines and passengers alike, stifling demand and profitability. A reduction in these taxes is seen as crucial not only for stimulating air travel but also for bolstering the financial health of airlines.
In addition to tax reforms, there is a pressing need for infrastructure investments to modernize and expand airport facilities across the country. The current capacity constraints and outdated infrastructure hinder operational efficiency and limit growth potential. Therefore, the industry advocates for substantial government funding and support to upgrade airports, improve connectivity, and enhance passenger experience.
Furthermore, policies that encourage fleet expansion and renewal are seen as instrumental in enhancing operational efficiency and reducing environmental impact. Measures such as import duty waivers on aircraft and spare parts could incentivize airlines to invest in modern, fuel-efficient fleets, thereby lowering operating costs and aligning with global sustainability goals.
Simplifying regulatory processes is another critical area of concern for the aviation sector. Cumbersome procedures for route approvals, aircraft registrations, and operational clearances not only delay business operations but also add unnecessary administrative burdens. Streamlining these processes would improve overall efficiency and support the industry’s agility in responding to market dynamics.
Lastly, there is a growing emphasis on promoting sustainable practices within the aviation sector. Airlines are increasingly adopting initiatives such as sustainable aviation fuels (SAFs) and carbon offset programs to reduce their carbon footprint. Government support through incentives and regulatory frameworks could accelerate these efforts and position Indian aviation as a leader in sustainable air travel.
In conclusion, as the government prepares to unveil Budget 2024, the aviation industry’s expectations are clear: it seeks proactive policies that alleviate tax burdens, promote infrastructure development, facilitate fleet expansion, streamline regulations, and encourage sustainability. By addressing these priorities, policymakers have an opportunity to rejuvenate the sector, enhance its global competitiveness, and pave the way for sustainable growth in Indian aviation.