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Economic Survey 2022 says Air India sale will boost recovery in aviation sector

The survey says the Air India handover, coupled with a boost to digital infrastructure and structural reforms in telecommunications, will have a positive impact on the pace of recovery of the Indian aviation sector

January 31, 2022 / 03:57 PM IST

Recovery of the pandemic-hit Indian aviation sector will benefit from the sale of Air India and the handover of the airline to the Tata Group, the Economic Survey tabled in Parliament on January 31 said.

The annual report card of the economy that comes a day ahead of the Budget said the Air India handover, coupled with a boost to digital infrastructure and structural reforms in telecommunications, would have a positive impact on the pace of recovery of the aviation sector.

"The pace of this recovery and further growth is likely to continue due to consistent efforts of the government to bring in various structural, fiscal and infrastructural reforms in addition to a slew of measures/schemes like the production linked incentive scheme (PLI) to support industries,” the survey said.

The Tata group on January 27 got control of Air India almost three months after winning the bid to take over the debt-laden flag carrier in Rs 18,000 crore equity and debt deal.

Economic Survey 2022: Here Are The Key Takeaways

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The sector is on the path to gradual recovery from the turbulence caused by the COVID-19 pandemic, as seen by the steady rise in monthly air passenger traffic, the survey said.

The accelerated pace of vaccine roll-out and easing of travel restrictions also boosted recovery.

Follow our live blog for the latest on the Economic Survey 2022

However, the survey warned that new restrictions introduced across the globe due to the spread of the Omicron variant pose a threat to tourism as well as domestic passenger traffic in the near term.

"The trajectory of the tourism sector, especially international tourism, remains uncertain,'' said the Economic Survey. ''The emergence of the Omicron variant and the consequential travel restrictions pose a threat to domestic passenger traffic in the near term.''

Also read: Economic Survey 2022: WPI continues to surge, India needs to be wary of imported inflation

To shore up the aviation sector, the government took steps such as privatisation, modernisation and expansion of airports, boost to the regional connectivity scheme UDAN and incentivisation of maintenance, repair and overhaul (MROs) operations, it said.

''During the last four years after commencement of the scheme, 948 valid awarded routes have been allotted to various airlines and out of which 389 RCS routes connecting 62 unserved and underserved airports (including six heliports and two water aerodromes) have been operationalized so far,'' the survey said of the UDAN scheme.

The survey also added that the newly introduced Drone Rules in August 2021 and production-linked incentive scheme for drones are expected to catalyse super-normal growth in the upcoming drone sector.



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