India to invest Rs 1 trillion in setting up 100 new airports by 2024

As per the people with knowledge of the matter, to revive economic growth in Asia's 3rd largest economy, India is planning to start 100 additional airports by 2024. Along with this the proposal includes the 1,000 new routes which is going to be connected with smaller towns and villages, the sources said last week. The plan was discussed in a meeting to review infrastructure needed by 2025, as stated by sources, as the discussion is private, asking not to be identified. Steps to start a plane-lease financing business in the country was also discussed, they said.

With economic activity at a six-year low and probability of further slowdown looming, to revive the growth and achieve a target of making India a US$ 5 trillion economy by 2025, Prime Minister Narendra Modi is keen to double down on infrastructure projects. To compete with the likes of Vietnam and Indonesia for investments amid global trade tensions, Government of India cut the corporate tax rates last month, putting India on par with some of the lowest in Asia.

India's plan to expedite development of airport still trails that of China's, which has a goal of having 450 commercial airports by 2035, which is almost double the number at the end of 2018.

According to the people, proposal by India's think tank also includes enhancing the number of locally trained pilots to 600 a year and double the domestic aircraft fleet to 1,200 during the period. To build airports in next 5 years, Government of India has committed the investments of Rs 1 trillion.

Three years back from now, only 75 of India's 450 runway were functional, as airlines avoided flying to smaller, World War-era airstrips in smaller towns. But with the support of Modi's subsidy program, which partly funds the airlines who losses while capping fares on remote routes and at the starting of 2019, has also helped by adding 38 airports to nation's aviation map, although, the contracts were given to airlines to start flights to a further 63 airports with no or limited connectivity.

While the lure of India, with an emerging middle class flying for the first time, has attracted companies such as Singapore Airlines Ltd. and AirAsia Bhd. to set up local units, provincial taxes in the nation make jet fuel one of the most expensive in the world. The government is aware of the high taxation burden and higher jet fuel prices and will rationalize the tax regime as soon as next year, the people said.

They also said, India will also encourage the use of drones, for which the policy has been announced by government this year allowing unmanned vehicles to fly beyond the line of sight, and sees the number of legal drones reaching a million by 2024. By 2021, country will prepare the drone corridors and by 2023, will allow delivery of goods by drones.