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May 20, 2024

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The ruling Bharatiya Janata Party (BJP) ‘s election manifesto emphasizes the civil aviation sector. It was released in the run-up to the general elections in India, which are being held in seven phases. The last phase of voting is scheduled to be held on June 1 (BJP MANIFESTO 2024 | Bharatiya Janata Party).

The 76-page manifesto mentions the civil aviation sector about 11 times and talks about not only introducing “the Amrit Kaal Civil Aviation Master Plan to transform our airports into regional international hubs, providing single-point connectivity to designated regions worldwide, with the vision to position Bharat as the leading aviation ecosystem of South Asia.”

Prime Minister Narendra Modi introduced the concept of Amrit Kaal, or ‘The Era of Elixir,’ to the nation on India’s 75th Independence Day. Amrit Kaal is the Prime Minister’s Vision 2047 for ‘New India,’ a new dawn for the country that will bring with it the chance to fulfill the nation’s aspirations. India gained independence from the British in 1947.

The manifesto also states that the party will strengthen the civil aviation ecosystem by encouraging Maintenance, Repairs, and Overhaul (MRO) activities, as well as aircraft financing and leasing activities, through comprehensive government support programs under the Make in India initiative.

It adds that if voted back to power, the party will enhance air connectivity multi-fold by developing and operationalizing new airports, helipads, and aerodromes. “Ensuring the modernization of airports we will transform airports into multi-modal hubs with integrated transit facilities such as buses, metro and rapid rail among others by effective use of PM’s Gatishakti National Master Plan which seeks to provide multimodal connectivity infrastructure to various economic zones,” the party manifesto says.

The Master Plan provides a comprehensive database of the trunk and utility infrastructure and ongoing and future projects of various Infrastructure and Economic Ministries/Departments of Central Government and States/Union Territories.

There is also mention of the expansion of international airports in line with the BJP’s vision for enhanced connectivity and economic growth, for which the  number of international airports will be increased. “Formulating a master plan for airport transformation we will introduce the Amrit Kaal civil aviation master plan to transform our airports into regional international hubs, providing single-point connectivity to designated regions worldwide, with the vision to position Bharat (India) as the leading aviation ecosystem of South Asia,” the manifesto adds.

There is also talk of bringing a commercial aircraft manufacturing ecosystem to Bharat (India) for which the party plans to design a policy for aerospace manufacturing in the country and trying to develop its own passenger aircraft.

Commenting on the manifesto, Satyendra Pandey, Managing Partner Aairavat Technology & Transport Ventures Private Ltd, says that the vision is ambitious. It includes a civil aviation masterplan for transforming airports, promoting MRO and financing activities, and bringing a commercial aircraft manufacturing ecosystem to India.

 “The correct policy prescriptions are critical in aviation as the sector has a multiplier effect on economic growth and jobs. By the government’s own estimate, the economic multiplier is 3.1X and the jobs multiple is 6X. So every Rupee invested and every job created via aviation has downstream impacts that bode well for growth,” Pandey points out.

He further says that the large gap in the manifesto is that airlines have not been mentioned even once. “And airlines are at the apex of the civil aviation ecosystem. So this will effectively have to be addressed,” Pandey adds.

Pandey says that, by numbers, India in 2024 will see five large commercial airlines, with a $14 billion turnover and $1.7 – 2.0 losses. “The market structure will be a duopoly, with more than 80 percent of the domestic market dominated by two airlines. For policymakers, both of these would be items to address given the growing travel demand.”

Pandey thinks the points on promoting MRO and financing activities have been well received but will require intense bilateral involvement. “For instance, financing requires a revisit of tax treaties and benefits, and MRO efforts require a push for technology transfer,” he says, adding that other items like “regulatory capacity, schemes such as UDAN (the regional connectivity scheme up for review in 2026) and state-level initiatives will also require targeted intervention.”

He adds that the broad policy outcomes will depend on precision policy interventions, and civil aviation will be a key driver for India to realize its ambitions.

Since coming to power in 2010, the BJP has firmly been focused on the civil aviation sector. Not only did the government launch the Regional Air Connectivity Scheme, which seeks to connect smaller towns and make flying affordable, but it also successfully sold the state-owned airline Air India. The airline was losing between Rs200 and Rs250 million a day, which the government was forced to subsidize.

In addition, it managed to privatize six airports. The Airports Authority of India primarily owns airports in India. Apart from the six airports the Prime Minister Narendra Modi-led government privatized, the airports in major metro cities like Delhi, Mumbai, Hyderabad, and Bengaluru had also been handed over to the private sector earlier.

We have noted that India’s commercial aviation sector is maturing, leading to patterns similar to those seen in other mature markets.

author avatar
Ashwini Phadnis
Former Senior Deputy Editor at Business Line (aka The Hindu Business Line)

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