Union Budget 2025 | Financial solutions needed as aviation sector faces headwinds: Poonam Verma Sengupta Partner, JSA Advocates & Solicitors

'The government should incentivise airlines with lower operating costs and enhance airport facilities to attract passengers, aligning with the Viksit Bharat 2047 vision to expand airports to 350,' Sengupta said.

The Union Budget for the upcoming financial year is all set to be presented on February 1, 2025, by Finance Minister Nirmala Sitharaman. According to reports, the Narendra Modi government may consider slashing income tax for individuals earning up to Rs 15 lakhs per annum and extend the tax relief bracket in a bid to provide relief to the middle class and boost consumption.

Ahead of the Budget, Poonam Verma Sengupta Partner, JSA Advocates & Solicitors said "India's aviation sector faces significant global supply chain issues, affecting aircraft and engine deliveries. Engine shortages have grounded over 100 aircraft due to delays in spare parts. In the upcoming budget, the government must consider providing financial solutions, like low-interest loans, and enhance compliance with global conventions like the Cape Town Convention to improve lessor confidence and address the GoAir insolvency fallout."

This year has seen several flight disruptions due to hoax bomb threats. Addressing this, Sengupta said "Between August 2022 and November 13, 2024, a total of 1,143 hoax bomb threats were reported by domestic airlines which resulted in huge disruption to airline operations. Despite there being a legislation in place, the investigation authorities have not been able to handle the hoax bomb threats reported by domestic airlines adequately. The Aircraft (Security) Rules, 2023, introduced stricter penalties, but investigative authorities need more proactive measures."

Moving away from the metropolitans, Sengupta observed "In tier 2 and 3 cities and town, there is a struggle due to low passenger demand, despite heavy infrastructure investments. The government should incentivize airlines with lower operating costs and enhance airport facilities to attract passengers, aligning with the Viksit Bharat 2047 vision to expand airports to 350.”

Sengupta further said, "There is also a need to strengthen cyber security for airline operations as well as for the passengers at the airports. Another factor is an uncontrollable surge in the air ticket prices during festive season. The Parliament's discussion on capping air ticket prices and establishing a quasi-judicial body to regulate airfares could be a positive step for consumer interests. India’s MRO industry is booming as a result of Atmanirbhar Bharat initiative and ease in export and re-import norms. Technological advancements and private investments has highlighted the positive growth in India and the sector's potential for global leadership."

Union Budget 2025 | Nirmala Sitharaman, who continues to be Finance Minister, will present her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', reports suggest there might be a tax relief for those making up to Rs 15 lakh per year. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.