Boost to aviation industry with enhanced UDAN scheme, new airports, and more, BA

Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2025-26 in Parliament, announced significant initiatives aimed at strengthening India’s aviation sector. The key takeaways include an enhanced regional connectivity scheme under UDAN, the development of new greenfield airports in Bihar.

Additionally, she also announced a revision in the threshold for tax collected at source (TCS) on foreign remittances.

The government’s flagship Regional Connectivity Scheme, UDAN, which has played a pivotal role in making air travel accessible to the middle class, is set for a major expansion. Since its launch, UDAN has connected 88 airports and operationalized 619 routes, benefiting 1.5 crore passengers.

Building upon this success, a modified UDAN scheme will be introduced to further improve regional connectivity by adding 120 new destinations. The initiative aims to facilitate air travel for 4 crore passengers over the next decade, significantly improving access to remote and underserved regions. In addition, the scheme will support the development of helipads and smaller airports in hilly, aspirational, and North Eastern districts, ensuring that air travel becomes a viable option in these challenging terrains.

Greenfield Airport in Bihar
Recognizing the growing aviation needs of Bihar, the government has announced plans to develop greenfield airports in the state. These airports will complement the existing infrastructure, which includes the expansion of Patna airport and the development of a brownfield airport. The move is expected to boost economic growth and improve connectivity for the state’s residents and businesses.

Increase in TCS Threshold for Foreign Remittances
In a move that will benefit international travelers and outbound tourism, the Finance Minister has proposed an increase in the threshold for collecting tax at source (TCS) on remittances under the RBI’s Liberalized Remittance Scheme (LRS). The limit has been raised from ₹7 lakh to ₹10 lakh, offering relief to individuals making foreign transactions, including travel-related expenses.

The aviation industry is likely to benefit from these initiatives as they align with the broader goal of strengthening infrastructure, expanding accessibility, and promoting seamless travel.