Budget 2007-08: No lift for aviation

New Delhi: On the face of it budgetary allocation for the aviation industry for the fiscal 2007-08 has gone up from Rs2,256.36 crore to Rs12,192.09 crore. But the feeling in the country's aviation industry is that it has been bypassed by the budget.

The massive hike in outlay has been made primarily to help public sector carriers Indian and Air India fund their fleet acquisition of 111 aircraft. The hike will also aid the Airport Authority of India (AAI) develop 35 non-metro and other airports. Pawan Hans Helicopters, Air India Charters Limited and regulatory body, the Directorate General of Civil Aviation (DGCA) are the other beneficiaries of the budget's largesse.

While the allocation for Air India has risen from the revised estimates of Rs490.84 crore for 2006-07, to Rs6,337.01 crore, the allocation for Indian is up from Rs350 crore, last year, to Rs2,507.70 crore. The allocation for Air India Charters has gone up more than ten times, from Rs70.70 crore to Rs1,124.47 crore. Air India Charters operates the low cost carrier Air India Express, which operates in the Gulf region.

Pawan Hans Helicopters Ltd has seen its outlay go up from Rs180 crore to Rs246.5 crore, while that of AAI has gone up from Rs1,149.82 crore to Rs1,961.41 crore. Regulatory body, the DGCA, will also be glad about the massive hike in its outlay, which has gone up from Rs39.6 crore to Rs108.86 crore, while the outlay for the Bureau of Civil Aviation Security has more than doubled from Rs7.08 crore to Rs18.43 crore.

While there would be no dip in fares for passengers on metro routes, some cheer is in evidence as far as operators of aircraft weighing less than 40,000 kg are concerned. Turbine fuel will now be brought under the declared goods category, with a CST levy of only 3%, as against the earlier 26-30% for all aircraft under 40,000 kg. For operators such as Paramount Airways, this alone could result in annual savings of about Rs100 crore. For Air Sahara it could result in annual savings of Rs25-30 crore. This could also mean the launch of new long-distance non-metro routes, such as Cochin-Ahmedabad.