The Ministry of Civil Aviation says that between 2020 and 2022, the domestic aviation industry suffered a loss of ₹24,000 crore. Of this, the losses in FY 2020-21 stood at ₹12,479 crore and ₹11,658 crore in FY 2021-22. The ministry says it has taken several initiatives to support the aviation sector. "The government is proactively supporting the aviation sector by providing a stable policy environment and incentivising competition-led growth," the ministry said. 

The ministry says 17 states and union territories have reduced high value-added tax (VAT) on aviation turbine fuel (ATF). The government has also reduced the goods and services tax (GST) for domestic maintenance, repair and overhaul (MRO) services from 18% to 5%. 

"The Government announced new MRO guidelines on 1st September 2021 with a view to create a congenial atmosphere in the country for the development of the MRO industry for aircrafts/ helicopters/ drones and their engines and other parts. These guidelines inter-alia provide for the allotment of land at AAI airports through call of open tenders without levy of any royalty or cess of whatsoever nature to MRO operators," the ministry said. 

"The Government has approved the 'Revival of unserved and under-served airports' scheme for the revival and development of 100 unserved and under-served airports. In order to boost the aviation infrastructure, the Airports Authority of India (AAI) and other airport developers have taken up the development of new and existing airports with a projected capital expenditure of approximately ₹98,000 crore in the next five years for expansion and modification of existing terminals, new terminals and strengthening of runways, among other activities," it added.

The ministry said the domestic air passenger traffic has picked up its pace in FY22-23 and is expected to reach 97% in the pre-covid level. 

"India has witnessed a double-digit Compound Annual Growth Rate (CAGR) of 14.5% in terms of domestic passenger traffic during the period 2014-15 to 2019-20. During 2020-21 and 2021-22, there was a dip in domestic air traffic due to the impact of the Covid-19 pandemic. The domestic air traffic has again picked up pace during the current financial year i.e. 2022-23 and is expected to reach around 97% of the pre-covid level," the ministry said. 

Meanwhile, the allocation to the aviation sector in the Union Budget FY23-24, which was presented by Finance Minister Nirmala Sitharaman yesterday, more than halved to ₹3,113.36 crore. Of this, ₹3,026.70 crore is for revenue and ₹86.66 crore is for capital.

The Finance Minister also announced the setting up of 50 new airports, water aerodromes and revive advanced landing gears in order to improve regional air connectivity. The government has also announced plans to develop 50 tourist destinations and sector-specific skilling and entrepreneurship development schemes such as the Swadesh Darshan Scheme. 

Ratings agency ICRA says the allocation to the aviation sector in the budget is aimed at boosting domestic tourism and travel. "The Union Budget for FY2023-24 has reiterated its focus on improving regional air connectivity through setting up of 50 additional airports, heliports, water aerodromes and revival of advance landing grounds, which will boost domestic air travel," it says. 

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