Day 44 – Q 1. What are the challenges faced by India’s civil aviation sector? Do a causal analysis. (10 Marks)

1. What are the challenges faced by India’s civil aviation sector? Do a causal analysis. (10 Marks)

भारत के नागरिक उड्डयन क्षेत्र के सामने क्या चुनौतियाँ हैं? एक कारण विश्लेषण करें।

Approach- 

Candidates need to write about the Indian civil aviation sector and it’s significance also highlight the challenges of civil aviation in India. 

Introduction 

The civil aviation industry in India has emerged as one of the fastest growing industries in the country during the last three years. India has become the third largest domestic aviation market in the world and is expected to overtake UK to become the third largest air passenger market by 2024.

Body 

Significance of aviation sector in India

• Contributes to GDP: The Aviation sector in India currently contributes $72 bn to GDP
• Job creation: Indian aviation sector to employ 4 million by 2035.
• Allied Sector Growth: Before COVID-19, Maintenance, Repair & Overhaul (MRO) industry was forecasted to grow at an expected 5 year CAGR of close to 10% by 2023
• Regional Connectivity: It boosts connectivity to smaller cities and north-eastern states. 

Challenges of Indian Aviation Sector

• Infrastructure deficit: unavailability of land to expand airports at their current sites, particularly in major cities
• High Fuel Costs: Fuel cost as a percentage of operating charges amounts to 45% in India as compared to the global average of 30 per cent.
• Procedural Complexities: Taxes and approvals by both Central and States governments increases the transaction costs of the aviation sector
• Inadequate Human Resource Capabilities: Shortage and gaps in the availability of industry-recognised skills – from airline pilots and crew to maintenance and ground handling personnel – constrains the growth of different segments of the sector.
• Weak MRO sector: 90% of the Indian MRO work is outsourced to countries like Singapore, Dubai, UAE, Sri Lanka and others.

Conclusion

India needs relaxation in some harsh regulatory measures and liberalisation policy for exit of an airline. With more private sector investment, tier II and tier III cities will also see new infrastructure development as envisaged in civil aviation policy of 2016.