With “large number of aspirational Indians” still out of the aviation radar, the Government on Thursday announced its intention to develop new airports in Tier-I and Tier-II cities through both public sector and Public-Private-Partnership mode.

In his maiden budget, Finance Minister Arun Jaitley also increased allocation for Directorate General of Civil Aviation (DGCA) by 40 per cent to take several measures, including initiatives to reverse the downgrading of aviation regulator by the US' Federation Aviation Administration (FAA). DGCA has been allocated Rs 113.13 crore as against Rs 80.71 crore last time.
Jaitley said the scheme for developing more airports in Tier-I and Tier-II cities will be launched through Airports Authority of India (AAI) or PPPs. For AAI, Jaitley has proposed to invest Rs 2,134 crore this fiscal, which is less than 2013-14 allocation of Rs 2,260 crore. However, Rs 1,231 crore was only spent by AAI last year.
While talking about PPP projects, he said India has emerged as the largest PPP market in the world with over 900 projects in various stages of development.
"PPPs have delivered some of the iconic infrastructure like airports, ports and highways which are seen as models for development globally. But we have also seen the weaknesses of the PPP framework, the rigidities in contractual arrangements, the need to develop more nuanced and sophisticated models of contracting and develop quick dispute redressal mechanism," he said.
An institution to provide support to mainstreaming PPPs called 3P India will be set up with a corpus of Rs 500 crore, he said.
The budget documents also showed that there is an increase in the investment in Air India, as part of the equity infusion envisaged in the government-sponsored turnaround programme. This fiscal, Rs 7,069 crore has been earmarked for investment in the national carrier while the allocation in 2013-14 was Rs 6,318.60 crore.
Overall, the Civil Aviation Ministry has been allocated Rs 9,474 crore as against Rs 8,865.40 crore in the previous fiscal.
The subsidy for Haj operations have decreased to Rs 550 crore from Rs 589.50 crore.