In a huge boost to civil aviation, India is to develop 100 new airports in the country in the next five years, Finance Minister Nirmala Sitharaman said on Saturday while presenting the government’s budget for the fiscal year 2020-21.
She set aside Rs 1.7 trillion (AED87,281 billion) for new transport infrastructure projects in 2020-21. This is one of the biggest financial allocations in the new budget. Port development is another area on which focus has been laid in her budget.
“Government will come out with a framework for ports and will look into corporatising at least one major port and subsequently its listing on stock exchanges,” she said. Civil aviation and ports development are areas in which the UAE and India have identified cooperation for mutual benefit, with companies in the UAE looking for involvement in a large scale.
The new airports will initially be used for flights under a scheme launched by the Narendra Modi government on October 21, 2016, to stimulate regional domestic air connectivity by making it affordable. But many of these airports will eventually have the capacity to receive international flights as India’s economy grows and tourism expands. At present, only 18 airports in India have foreign airlines flying into and out of them.
Under this scheme, known as UDAN – meaning ‘flight’ in Hindi – financial incentives in terms of concessions from the government and airport operators are extended to selected airlines to encourage operations from undeserved airports, and keep airfares affordable.
Sitharaman said in her budget speech that India is now the fifth largest economy in the world. She said central government debt has come down to 48.7 per cent of Gross Domestic Product from 52.2 per cent in the last five years.
Under a budget proposal which will institutionalise a historic business link with the Gulf, it is proposed to set up an international bullion exchange at India’s only International Financial Services Centre near Ahmedabad. The Minister hoped this will lead to “better price discovery of gold, create more jobs and enhance India’s position in such market.”
India has a huge appetite for gold for social and traditional reasons. For many decades a major source for gold is the Gulf through re-exports from souks and bullion merchants there.
Sitharaman announced that India’s insurance giant, the Life Insurance Corporation, LIC, in which the government now has 100 per cent ownership, will be partly privatised. Given the LIC’s size, experts are comparing the privatisation through an Initial Public Offering to a recent IPO by Saudi Aramco.