Barring elimination of duty on helicopter simulators, the burgeoning civil aviation sector did not get much of relief in the Budget on Friday.
But, Civil Aviation Minister Praful Patel said he would continue to pursue pending issues including reduction of taxes on jet fuel.
For the first time since the merger of the two national carriers into National Aviation Corporation of India Limited, the merged entity found a place in the budget with a drastic reduction in its outlay.
While the plan outlay for NACIL stood at Rs 5,786.48 crore (Rs 57.86 billion), the combined revised estimated outlay of last year for Air India and Indian was over Rs 8,094 crore (Rs 80.94 billion).
The budgetary provision for all aviation infrastructure has generally been reduced, apparently with the view that most of the airport modernisation programmes, barring those in Kolkata and Chennai, were being carried out through public-private partnership.
Kolkata and Chennai airports are being modernised solely by the state-run Airports Authority of India. As there was no relief on the industry demand for treating aviation turbine fuel as a 'declared good' to reduce the tax rate at a flat four per cent, Patel told PTI: "We shall continue to pursue the finance ministry and state governments for rationalisation of taxes on ATF".
However, separate allocations were made for development of airports in the Northeast and Jammu and Kashmir. Industry experts expressed disappointment over lack of provision for development of infrastructure in view of the fast-growing air traffic.
"Aviation infrastructure -- from airports to communication and air traffic management systems -- requires immediate attention. We are disappointed that these issues have not been adequately addressed in the budget," said Ankur Bhatia, executive director of the Bird Group, which caters to aviation IT infrastructure.
The only positive feature in the budget was the proposal to "remove the duty on helicopter simulators" to facilitate training of helicopter pilots in the country.
Industry sources said the long-pending issues relating to slashing of service charge on upper class air travel and exemption of hotel expenses to house the air crew by airlines have not been met.
The 2008-09 plan outlay was pegged at Rs 10,031 crore (Rs 100.31 billion), compared with the revised estimate of Rs 11,239 crore (Rs 112.39 billion) in the current year.
The plan investment for the aviation sector was also reduced from Rs 11,133.75 crore (Rs 111.33 billion) this fiscal to Rs 9,936.38 crore (Rs 99.36 billion).
While Rs 20 crore (Rs 200 million) was allocated for aviation projects in the Northeast, Rs 60.44 crore (Rs 604.4 million) was allocated for improvement of airport infrastructure in the Northeast, Jammu, Leh, Srinagar, Port Blair, Agatti, Puducherry and Aurangabad.
Even the provision for Haj charter services was reduced from Rs 513.87 crore (Rs 5.13 billion) this year to Rs 413 crore (Rs 4.13 billion) next fiscal.
