Aviation officials say the budget failed to meet the needs of the sector

According to airline executives, the industry has been worst hit by the pandemic and related restrictions on mobility, which have severely affected operations. This is in addition to higher operating costs, especially due to rising oil prices.

“While the industry was not expecting financial support from the government, the provision of tax breaks and eligibility for input tax credit would go a long way in helping the sector which is under huge financial stress due to the pandemic,” a senior airline executive said. The executive said on condition of anonymity. “The government has not addressed the concerns of the sector at all in the budget,” the official said.

Rating agency Icra Ltd forecasts India’s aviation industry to report a net loss 25,000 crore- 26,000 crore and its debt level is rising 1.2 trillion in this financial year.

Meanwhile, around 7,900 employees in the aviation sector have lost jobs in the past year, junior civil aviation minister VK Singh told Parliament in December.

In January, IndiGo asked the government to cut indirect taxes on the aviation sector to boost commerce and employment. In a post-Budget statement, IndiGo Chief Executive Officer Ronojoy Dutta lauded the budget outlay on infrastructure, saying the carrier expected tax relief in the form of lower excise duty on jet fuel and concessional finance to airlines.

Overall, the FY23 budget has approved 10,667 crore for the Ministry of Civil Aviation. it also includes 600 crore to revamp the regional connectivity scheme, while AIAHL, a specialized company that houses Air India’s debt, has been allocated. 9,259.91 crore to allow servicing of debt transferred to Air India post financial restructuring.

“However, the budget has increased the allocation for the aviation sector since last year (ie from 3,224 Cr to 10,667 crore), it doesn’t really provide any immediate relief to the struggling sector,” said Poonam Verma, partner, J Sagar Associates (JSA).