Indian aviation industry hails Union Budget 2018

February 1, 2018: The aviation sector appeared buoyed by the measures announced in the Union Budget 2018.

Said Pierre de Bausset, president and managing director of Airbus India, “The budget has sought to strike a balance between India’s need for economic growth and the wellbeing of its citizens. Investments to improve people’s health, education and skill development are vital for long-term growth prospects of a country, and the budget has rightly focused on them. It addresses aspirations of a modernising nation through initiatives to expand air connectivity under the UDAN scheme. The government has also announced measures to push its ‘Make in India’ programme, including plans for two defence industrial corridors and a new industry-friendly defence production policy in 2018. We hope such steps will foster a sustainable eco-system that will promote investment and help expedite modernisation of the armed forces in a constantly evolving strategic environment.”

Amitabh Khosla, country director-India of IATA said: “We welcome the focus on the airport infrastructure capacity announced in the Union Budget 2018. According to our 20 year passenger forecasts, we anticipate India to evolve as the third largest aviation market by 2024. But this is by no means guaranteed. To make this a reality, airport capacity in India needs to be augmented and expanded quickly. IATA had earlier recommended and is supportive of leveraging AAI’s balance sheet for infrastructure creation and expansion. But the big question mark on capacity, and a critical area of concern for IATA continues to be about Mumbai airport. Navi Mumbai airport is still a distant dream. Meanwhile, Mumbai continues to fall behind in aviation activity, and Maharashtra is unable to maximise the economic potential that can be delivered by aviation. We urge the government to urgently look at innovative approaches to bridge the infrastructure shortfall.”

Aneel Gambhir, CFO of Blue Dart said: “We welcome the Union Budget 2018 announced by Finance Minister, which has recognised infrastructure as a growth driver of the economy. The investments in infrastructure are estimated to be over Rs. 50 lakh crore. This will support the growth of GDP and connect and integrate the nation with a network of roads, airports, railways, ports and inland waterways. To facilitate trade and e-commerce, the government should consider aviation turbine fuel (ATF) under the ambit of GST as the excise / VAT paid on these products are not available as input credit. Under the Service Tax regime, input credit was available for the excise paid on ATF. Under GST, it has a negative impact on logistics costs.”

Julian Michael Bevis, senior director, group relations South Asia of the Maersk Group said: “We welcome the Budget's focus on boosting India's rural economy with a holistic focus on the agricultural sector, including fisheries and animal husbandry, and increased outlays for the textile sector. India has the opportunity to grow its share of global trade, in which food and textiles are important segments. Initiatives like improved minimum support price and operation green; increased outlays towards fisheries, aquaculture and animal husbandry funds, and setting up of food parks will strengthen the overall food ecosystem. We also congratulate the government on broader electrification and use of technology in railways and for considering new technologies such as block chain and artificial intelligence. These coupled with continued focus on in-country infrastructure development will help connect smaller producers in India to global markets, and improve the country's overall competitiveness. As a global integrator of container logistics, Maersk has been partnering Indian business for global trade since 1990. We recognise the potential of smaller farmers and businesses in the hinterlands and have been investing in building our in-country warehousing and container depot facilities to support these customers.”

Raaja Kanwar, managing director of Apollo LogiSolutions Limited said: “Finance Minister, Arun Jaitley has presented a well-balanced and positive budget. We welcome the proposal of the national logistics portal as it will improve the transparency and visibility of cargo movement across the country. Infrastructure is the growth driver of our economy. With a large number of players serving metro cities and cut-throat competition on price, many logistics companies are looking to build out their last mile capabilities in Tier-II and Tier-III cities. These regions are still relatively underserved by logistics companies and have a booming middle-class, which is driving massive demand. With digital India and bringing millions of Indians online, the rise of digital payments, dedicated marketing efforts of large e-commerce players, there is a growing e-commerce demand from regions beyond metros. On the multi-modal side, Bharatmala project is a positive development, coupled with e-Way bill implementation, which will result in faster turnaround times for on-road transportation. With the announcement of 1.48 lakh crore allocated to Railways, we hope that there is a thrust on improving freight logistics apart from better passenger connectivity. It will help logistics industry drive up efficiency through rail networks in terms of costs and carbon reductions as the current logistics movement is skewed towards road transport. The government’s plan to expand its current 124 airports by five times seems skewed in favour of passenger movement, however the development of airports across the board is a positive shift in building a robust logistics network. We expect that freight movement is given due cognizance as well. The mass formalisation of MSME sector will spur local manufacturing, which will increase the need for logistics services across the board. It will boost the overall logistics sector, resulting in robust economic development.”

Chander Agarwal, managing director of TCIEXPRESS said: “As rightly mentioned by the Finance Minister in his Budget speech today, infrastructure is the key growth driver of the economy and the government has made its intent clear to develop infrastructure in India by introducing several important measures. Logistics getting an infrastructure status last year, such focus to develop infrastructure in itself is a huge boost to the logistics sector. We welcome government’s decision to allocate of Rs. 5.35 lakh crore to develop 35,000 km under phase-1 as part of Bharatmala project. We also welcome other important initiatives like the decision to boost the MSME sector by allocating Rs. 3,794 crore in the form of capital support; initiative to set-up national logistics portal as a single online window to link all stakeholders, and decision to allocate Rs. 2.4 lakh towards smart cities development will push the need for express companies like TCIEXPRESS. All these along with other important measures like introduction of digital payment models like pay-as-you-use system for toll payments will enable a cashless economy and will promote ethical and transparent business. Overall, this is a decent Budget, and these initiatives will bolster the need for express companies like TCIEXPRESS and help us operate efficiently. Ultimately, it will help in contributing more towards the GDP.”

Rajiv Agarwal, MD & CEO of Essar Ports said: “The budget clearly displays that post demonetisation, GST implementation and bank recapitalisation, the economy will witness an eight percent growth. The stress is towards recharging the rural economy by shoring up infrastructure, ensuring livelihood, doubling farm income and increasing agri exports. On the infra side, large spends are being done this year—Rs. 14.3 lakh crore on rural infrastructure, Rs. 14.8 lakh crore on the Railways, and Rs. 5.9 lakh crore on overall infra spends. These investments will provide impetus to growth, demand and employment generation.”