New Delhi: The Union Budget 2025 presented by Finance Minister Nirmala Sitharaman provides a decent bouquet of incentives focused on wooing the growth of civil aviation in India. The budget is quite focused on sharpening regional connectivity aimed at improving air travel access in underserved and remote areas, which will also spur infrastructure growth to meet the growing demand in the sector.
The highlight for the sector is a revamped and extended Ude Desh ka Aam Nagrik (UDAN) scheme. The restructured scheme anticipates the addition of around 120 new destinations to regional air connectivity with the intention of catering to poorly connected or not connected areas for air travel. The revamped UDAN aims to reach out to remote areas of hilly, northeastern, and aspirational districts, through small airports and even helipads, thus making air travel within the reach of millions of people, especially in the next decade.
Industry Responses to the Budgetary Allocations
The finance minister, while presenting the budget, allocated ₹2,400 crore, a considerable increase for the developing background of the country's aviation infrastructure through the Ministry of Civil Aviation. Nevertheless, for the current, the allocation for the UDAN scheme was cut to ₹540 crore from ₹1,244 crore for the last year. Such realignment is perceived as a newfound focus of the government to refresh the implementation of the new UDAN scheme in channelling resources for the development of airport infrastructure across the nation.
Industry leaders hailed the measures announced in the budget and were of the opinion that it will further bolster air travel and support tourism. Harsh Vardhan Agarwal, President of FICCI, welcomed the government's efforts to make air travel more accessible, particularly for the common man. “Aviation has received a very good welcome move because the UDAN scheme improves accessibility for the common man while travelling. It will also give a boost to tourism, which is a highly labour-intensive industry,” he remarked.
Former President of FICCI and Chair of the India Sanitation Coalition Naina Lal Kidwai voiced her support for the move, highlighting the contribution of improved connectivity to local economies.
"I am just amazed at how flights to even remote destinations are full. This means that the UDAN scheme, which has provided connectivity to our small towns, is working. The fact that we are planning to bring 150 more destinations under the scheme is very favourable because we are looking at connecting the country. For every such connection-whether road or flight-we end up creating employment opportunities and boost local industries," Kidwai said, pointing to India's significant progress on infrastructure, converting the nation into a global connectivity hub," she said. Kidwai further discussed the role of market dynamics in the aviation sector, noting that the growth of air travel would be driven by demand and supply forces. She also expressed her belief in market pricing as a means of fostering growth in the sector. “Anything that improves access and affordability is beneficial. Demand and supply have always been an issue, and some regulation can help. But ultimately, I believe in market pricing—whether it’s for labor markets or the provision of services. If there’s a shortage of supply, we need to increase it," she explained.
Aviation as a Key Enabler of Economic Growth
Pieter Elbers, CEO of IndiGo, underscored the transformative potential of the Union Budget for the aviation industry. He stated, “The Union Budget 2025 has outlined various great initiatives to further develop a future-ready travel ecosystem, with emphasis on people and infrastructure, and aviation as a key enabler. Investment in developing world-class airports, enhancing regional connectivity, capacity upgrades, procedures, regulatory frameworks, and streamlined visa facilities will all play a critical role in bringing this vision of developing India into a global aviation hub to life. By strengthening both domestic and international connectivity, we are fueling economic progress, bridging communities, and reinforcing aviation’s role as a catalyst for national growth.” The shift in focus towards regional airports and smaller destinations is expected to result in the democratization of air travel, benefiting a wide spectrum of travellers and creating economic opportunities in regions that have traditionally been underserved by the aviation industry, he said.
SpiceJet’s Support for UDAN and Regional Connectivity
Ajay Singh, Chairman and Managing Director of SpiceJet, voiced his enthusiasm for the aviation initiatives outlined in the budget, particularly the modified UDAN scheme. “This is a forward-looking, middle-class-friendly budget that promises to boost spending, stimulate development, and set the stage for India’s growth in the coming years. With the launch of a modified UDAN scheme that will introduce 120 new destinations and bring 4 crore additional passengers into the fold over the next decade, the aviation landscape in India is set for a transformative shift,” Singh said. He further emphasized the role of UDAN in driving economic growth and tourism, particularly in remote regions.
Aloke Singh, Managing Director of Air India Express, commented, "We are happy to see continued importance accorded to aviation and tourism, supported by new airports and a modified UDAN Scheme that will spread the benefits of air travel across the country. India has emerged as one of the largest and fastest-growing aviation markets globally, and a progressive vision for aviation and travel will further strengthen our position. The focus on developing 50 tourist destinations and promoting medical tourism will stimulate fresh demand, create new travel corridors, and strengthen the aviation ecosystem. We are particularly pleased to see a specific mention of augmenting airport infrastructure at Patna and Bihar, where AIX has just commenced services. This resonates well with our vision of being new India’s smart connector, focusing on tier 2/3 cities, the young, aspirational travellers, and the new emerging segments driving the next phase of growth. We applaud these forward-looking measures that will make air travel more accessible, inclusive, and a key driver of economic growth."
Vinay Dube, Founder and CEO, Akasa Air said, ‘’The Union Budget 2025 marks a significant step in supporting the sustained growth of India’s aviation sector. We commend the government’s commitment to infrastructure which will make air travel more accessible, thereby boosting tourism and the economy on the whole. Aligned with the vision of Viksit Bharat 2047, this focus on aviation strengthens India’s position as a global hub, ensuring greater mobility for all and contributing to a more connected, inclusive nation. As India’s fastest-growing airline, we applaud the government’s continued efforts to fuel the sector’s growth and make air travel accessible to a greater number of Indians.”
The Drone Industry’s Perspective
Chirag Sharma, CEO & Founder of Drone Destination, welcomed the government’s emphasis on technology and infrastructure, noting the positive implications for the drone industry. He highlighted how drones could play a key role in agriculture and logistics, particularly in remote areas, further enhancing the government’s vision for self-reliance and rural development.
New Airports in Bihar: Boosting Regional Growth
The budget mentions the increasing aviation needs of Bihar and the introduction of Greenfield airports in the region. The introduction of Greenfield airports is anticipated to cushion the expansion of Patna Airport, which will give a dramatic boost to the economy of the state. The new airports will not only increase ease of air travel for the people in Bihar but will also open up avenues for business and tourism, thus providing a much-needed boost to infrastructures within the state. Thus, the focus on Bihar's aviation infrastructure indicates the commitment of the government to redress regional inequalities and foster inclusive development. New airports will ensure better connectivity, and reduced travel time, and that flying becomes a viable option for the people of Bihar, which will ultimately contribute to the overall development of the state.
The Union Budget for 2025 outlines the roadmap for the aviation industry, going beyond mere highlighting towards a pragmatic one for India. The various initiatives seeking to enhance regional connectivity, further develop infrastructure, and expand the scope of the UDAN scheme seem to form a solid foundation to lay out a more inclusive and accessible sustenance framework of air travel. The expected initiatives are likely to provide a boost to tourism, spur the economy, and thereby help empower local economies, contributing to India’s larger narrative of becoming a global economic powerhouse.
While many of these initiatives will evolve aeronautics, the Indian realm will gain more importance among millions who need air transport to keep this viable for national development. Notably, the very commitments to bolster guidelines on regional connectivity, and infrastructures, will ensure that all parts of the nation benefit from air travel and thus will usher in unity and prosperity.
