What the Union Budget 2023-24 have in store for Aviation and Transport

It is said that transportation and connectivity act as veins  that help build a robust economy. Thus, in the Union Budget 2023, the government has paid much attention to enhance these sectors that took a hit owing to the pandemic.. Learn more by reading this blog.  

Highlights of the Union Budget 2023 on Improving Nationwide Connectivity

Here is how the Union Government plans to improve the transportation sector:


Since the introduction of Ude Desh ka Aam Nagrik (UDAN) scheme was launched in 2017, air traffic in Tier II and Tier III cities has seen noteworthy increase i.e., 28% in 2015 to 36% in 2022. However, the aviation sector took a major hit during the pandemic and it is still recovering from that loss.

The Government of India has planned to revive 50 airports to improve regional air connectivity around India. Apart from this, there is also a plan to make additional heliports, advanced landing grounds and water aerodromes. 

At present, only 30% of Indian residential areas have easy access to airports.This move is therefore aimed at increasing air traffic from Tier-II and III cities and to make air travel more accessible to the common people.. 

Furthermore, constructing  additional airports is expected to have a multiplier effect in creating  a demand in other sectors. For instance, constructing landing sites will need infrastructural investments, creating a high demand for steel and cement.

Additionally, constructing new airports will create new employment opportunities, boost tourism and reduce congestion in existing ones.  


The Railways sector has received its highest-ever budget allocation with  the Union Budget 2023. It stands at ₹2.4 lakh crore, which is approximately 9 times its allocation in 2013-14 and a 51% jump from the allocation received in 2022-23. 

The intent behind this move is to spend on modernisation and improvement of existing infrastructure, invest in new emerging technologies such as green trains and green energy, and establish various corridors. They plan to make the nation’s first hydrogen train, which will be completely constructed in India and aim to complete this project by the end of this year. Moreover, in the next 3 years, the Ministry of Railways also plans to launch 35 more such hydrogen trains.

In line with India’s Nationally Determined Contributions (NDCs), the Railways also plan to construct an Ultra Mega Solar Plant. It will help move towards their goal of zero carbon emissions and enhance their efforts to electrify their operations fully. 

In addition, the Railways also plan to start their bullet train project in Maharashtra and start operations of 500 Vande Bharat trains within the next 3 years. Apart from this, they are also planning to construct 100 additional Vistadome coaches and add 5 to 6 new circuits for its Bharat Gaurav Tourism Train. It will help them attract high volumes of both foreign and domestic tourists.


For improving roadway connectivity across India, the Union Budget 2023-24 has allocated ₹2.7 lakh crore to building highways. In this outlay, the National Highways Authority of India (NHAI) has got ₹1.62 lakh crore to finish its behind schedule pending projects. It did this to increase the size of India’s highway system to 25,000 km, which is a target to finish 14,000 km in the financial year 2024. 


Regarding waterways, Finance Minister Nirmala Sitharaman has announced that the government plans to utilise India’s eastern and western sea lines for developing coastal shipping. India’s 7,500 km adjoining coastline has access to several inland waterways and that can be leveraged to provide a low-cost and eco-friendly means of transportation of   passengers  freight.

At present, inland waterways only account for 6% of the freight modal mix and attempts have been made in the past to better utilise the structural advantage India naturally possesses.

Coastal shipping will be promoted through viability gap funding and public-private-partnership (PPP), thus helping reduce domestic freight logistics expenses. In the 2023-24 Union Budget, the government has committed a capital outlay of ₹75,000 crore, among which private sources will be contributing ₹15,000 crore.

Final Word

Transportation plays an important role in the functioning of almost all industries. With a generous capital allocation to this sector, the government has fortified India’s pathway to becoming one of the most powerful industrial nations worldwide.  

Frequently Asked Questions (FAQs)

How will the 2023 Union Budget benefit the petrochemical industry?

The Indian Government has decided to remove customs duty on denatured ethyl for use in manufacture of industrial chemicals to support the Ethanol Blending Program. It will help the nation transfer to cleaner means of energy and reduce the overall carbon footprint.

Did the 2023 Union Budget focus on the tourism sector?

The Government has decided to develop 50 locations into tourist spots to boost the tourism sector. They will offer adequate facilities like high-quality food, guides, physical and virtual connectivity, etc., to attract foreign and domestic tourists. 

Did senior citizens get any benefits from the Union Budget 2023-24?

Keeping in mind the needs of senior citizens, the Union Budget 2023-24 raised the maximum deposits for the Senior Citizen Savings Scheme to ₹30 lakh from ₹15 lakh. Furthermore, for the Monthly Income Account Scheme, the maximum limit was increased to ₹9 lakhs for single accounts and ₹15 lakhs for joint accounts.   

How will the 2023 Union Budget benefit the petrochemical industry?

The Indian Government has decided to remove customs duty on denatured ethyl for use in manufacture of industrial chemicals to support the Ethanol Blending Program. It will help the nation transfer to cleaner means of energy and reduce the overall carbon footprint.

Ramya is a qualified lawyer with experience in both public policy and finance. She completed her B.A.LL.B (Hons.) from NALSAR University of Law, Hyderabad and is a registered advocate with the Bar Council of India. She is currently working in the Legal and Compliance department of Wint Wealth, and has previously worked closely with the Department of Economic Affairs, Ministry of Finance and ICICI Bank Ltd, Mumbai.

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