Analysis: Indian Aviation Budget 2019

For the aviation stakeholders, the budget was heavy on prose and lacking in numbers. A government that came in with a decisive mandate, was expected to deliver on bold reforms. Yet, given that the tax revenues are declining and ambitious social sector schemes continuing, aviation once again saw token allocations and scant consideration. Air India in the current year lost 7635 crore which equates to 20 crore per day. No funds have been allocated for the turnaround plan as opposed to last year’s 650 crore allocation and actuals of 3975 crore. The government seems to be firm on its plan and 2600 crore has been allocated towards the Air India special purpose vehicle (SPV). A footnote indicates that this is to service the loans that will be transferred to the SPV. The government seems to be firm on its decision to divest Air India, one way or another. The Finance Minister also laid out a vision for India to enter into aircraft financing and leasing activities. But details of the plan are not available yet. The intent is to copy Ireland’s blueprint given the success of Ireland as a world leader in aviation finance. What this requires is aligning several stakeholders along with rationalisation of tax policy. All of which requires time and focus. It is hoped that this will follow.