Union Budget 2021: What does it mean for the airways, railways?

Alok K Singh, Co-founder & CEO, Travelomint shares his expert opinion.

The Union Budget of 2021 is the first paperless Budget that laid emphasis on the enhancement of roadways, railways, metro lite infrastructure, ports & PPP in airports, ports and buses including vista coaches in tourist routes. The issues of the Travel, Tourism and Hospitality sector that need major attention were not addressed in the Union Budget 2021. 10% of India’s GDP is contributed by Tourism, which is not a small amount. There is an urgent requirement of a boost in this sector to revive it back. 2020 was a challenging year for this sector, millions of people lost their jobs. Directly or indirectly, this sector employees around 75 million people. Immediate support could help the industry to overcome the devastation caused by the pandemic. The government has made an aesthetic structure of the allocation for infrastructural development but it needs to focus on recovering and contributing to the economy hastily.

There are two major schemes of tourism sector namely PRASAD and Swadesh Darshan, both of them would be continued this year. The latest scheme of iconic sites has also been announced which has been designed to develop 19 identified iconic sites/destinations in the country. This scheme will follow a holistic approach that encompasses the use of technology, infrastructure and skill development, attractive private investment, branding and marketing.


There are many positive measures for the Aviation Industry in the Union Budget. To promote Atma Nirbharta, such measures include custom duty reduction, tax incentives, asset monetisation through PPP model, strengthening of public health units at the airport, disinvestment and strategic sale, and expanding the scope of the Krishi Udaan Scheme. The proposed budget is going to strengthen the country’s aviation eco-system and develop our country as an aviation sector manufacturing hub. In an effort to compete with leading countries like Hong Kong and Singapore, the establishment of an offshore finance hub named as Gujarat International Finance Tec-City will surely promote top-notch infrastructure and boost foreign investments with almost close to zero tax. For aircraft-leasing companies, the Finance Minister of India proposed a tax holiday. Along with this tax exclusion for the airlines that pay lease rental to foreign lessors was also proposed.


While announcing the Union Budget 2021, Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitaraman announced that a National Rail Plan for 2030 has been prepared for the creation of a future-ready railway system. The core of the strategy is to bring down the logistic cost of the industry. The estimated traffic requirements up to the year 2050 would be met assuredly. The whopping allocation of Rs. 1.1 lakh crore would definitely boost the infrastructure of the railways.

The freight Corridor Project proposed by the government of India is likely to decongest the prevailing railway network. It will result in an increase in the speed of trains from 25kmph to 70 kmph. It will let heavy haul trains to run smoothly carrying a load of 13,000 tonnes. The Automated Train Protection system that would be implemented to eliminate train collision owing to human error is going to bring tremendous changes in the railways network. The announcement of aesthetically-structured vista dome LHB train coaches in railways on tourist routes for an improved travel experience for passengers. This system would stress on the passenger’s safety and convenience resulting in a more relaxed railway journey.

MetroNeo and MetroLite are proposed for the mass transition. The focus on Kochi, Nashik, Nagpur and Chennai metro are likely to empower several project phases. Investment in the suburban railway network of Bangalore will cater relief to urban transport issues in the R&D and IT hub of the country.

The policies made for the Transport industry in the Union Budget 2021 are exquisite. The Government has taken a great move, this should have been done a long time back. Success does not come overnight, strict implementation of all the plans needs to be adopted to meet the desired results.