Union Finance Minister Nirmala Sitharaman’s budgetary provisions for the shipping and aviation sectors served to underline the growing importance of these sectors for the Indian economy which has its eyes set on becoming a fully developed economy by 2047.
For the long-term financing of the maritime industry, the minister proposed to set up a Rs 25,000-crore-corpus Maritime Development Fund. She said, “This will be for distributed support and promoting competition. This will have up to 49 per cent contribution by the government, and the balance will be mobilised from ports and private sector.”
With shipbuilding being an area of focal interest, shipbuilding clusters will be “facilitated” to increase the range, categories and capacity of ships.
This will include additional infrastructure facilities, skilling and technology to develop the entire ecosystem.
As shipbuilding has a long gestation period, the minister also proposed to continue the exemption of Basic Customs Duty (BCD) on raw materials, components, consumables or parts for the manufacture of ships for another ten years. “I also propose the same dispensation for ship-breaking to make it more competitive,” she added.
ALSO READ: Govt pumps Rs 6.81 lakh crore to supercharge India's military might
The Shipbuilding Financial Assistance Policy will be also revamped to address cost disadvantages. “This will also include credit notes for shipbreaking in Indian yards to promote the circular economy. Large ships above a specified size will be included in the infrastructure harmonized master list (HML)”.
Another area that the budget focused on is the promotion of inland water transport in the country. On this, the government had extended the tonnage tax scheme that is currently available to only seagoing ships to inland vessels as well. These inland vessels have to be registered under the Indian Vessels Act, 2021.
The budget also proposed a modified UDAN scheme to enhance regional air connectivity to 120 new destinations that carry four crore passengers in the next 10 years. With the UDAN scheme coming in for praise that has enabled 1.5 crore middle-class people to meet their aspirations for speedier travel, the minister also said the modified UDAN scheme will also support helipads and smaller airports in hilly, aspirational, and Northeast region districts.
She also informed the house that the government will facilitate the upgradation of infrastructure and warehousing for air cargo including high value perishable horticulture produce. Cargo screening and customs protocols will also be streamlined and made user-friendly.
With Bihar getting attention for Greenfield airports, Sitharaman said these Greenfield airports will be in addition to the expansion of the capacity of Patna airport and a brown-field airport at Bihta.