Union Budget 2025: Tourism gets off to a ‘flying start’

Finance Minister Nirmala Sitharaman, in her record eighth consecutive Union Budget on Saturday, proposed to modify the UDAAN Regional Air Connectivity Scheme to connect 120 destinations.

Union Finance Minister Nirmala Sitharaman, on Saturday (February 1, 2025), presented a record eighth consecutive Union Budget, in which one highlight was that she proposed to modify the UDAAN Regional Air Connectivity Scheme to connect 120 destinations for improving the experience of middle-class travel.

The UDAAN Regional Air Connectivity Scheme was launched in October 2016 with the aim of connecting small and medium cities with big cities through air service. And, in April 2017, the first flight under the UDAAN Regional Air Connectivity Scheme, from Shimla to Delhi, was flagged off by the Prime Minister, Narendra Modi, personally.

The Finance Minister said the scheme had enabled 1.5 crore middle-class people to make their aspirations for speedier, and more cost-effective, travel. She pointed out that the scheme had connected 88 ports and airports and made 698 routes operational.

Inspired by this success, a modified UDAAN scheme will be rolled out to enhance regional connectivity to 120 new destinations—some even in remote locations—and carry 4 crore passengers over the next 10 years. Hence, with the modification, an even greater number of citizens would be able to access reliable, and affordable, air travel, so contributing to their mobility for attending to their professional and personal goals.

This scheme will also support helipads and smaller airports in hilly, ‘aspirational’ and the North-East’s regional districts. Under the modified UDAAN Regional Air Connectivity Scheme, the airfare for a one-hour flight by ‘fixed wing’ aircraft, or half an hour’s journey by helicopter for a distance of 500 kilometres, has been fixed at Rs 2,500.

For financial year (FY) 2025, however, the overall budgetary allocation for the Ministry of Civil Aviation was slashed to Rs 2,357.14 crore, down from Rs 2,922.12 crore in the revised budgetary allocation for FY 2024. The Regional Air Connectivity Scheme, aimed at improving accessibility to remote areas, received Rs 502 crore, a significant drop from Rs 850 crore allocated in the FY 2024 revised Budget. The scheme’s funds were intended to revive 22 airports, starting 124 RCS routes, and providing Viability Gap Funding to enhance connectivity in the northeastern region.

And the Special Gift for Bihar

The Union Budget 2025 has unveiled several big-bang plans to bolster Bihar’s hospitality and tourism sector. Finance Minister Sitharaman announced several key infrastructure projects planned to improve connectivity and stimulate the growth of the regional economy.

There are plans to facilitate greenfield airports in Bihar, too, to meet the future needs of the state and improve both domestic and international connectivity. These will be over and above an expansion of the Patna airport. This is a planned step that is expected to attract more tourists and further boost the state’s hospitality industry.

There are allocations for financial assistance for the Western Kosi Canal Project, in the Mithilanchal region. This project will not only support agricultural development, but also contribute to regional tourism growth as it will improve management of the state’s water resources and scenic landscapes. Efforts to develop Bihar’s historical and cultural sites are set to receive a fillip, ensuring better facilities and visitor experiences.

All these initiatives are expected to benefit Bihar’s tourism industry significantly by introducing greater accessibility, encouraging investment in hotels and resorts, and boosting the small, local economies. The increased focus on connectivity and infrastructure will make Bihar a more attractive destination for both domestic and international travellers.

Developing 50 Tourist Places

Finance Minister Sitharaman said the Centre would work along with the states to develop 50 top tourist destinations in the country. To further develop tourist destinations, the government would work to improve travel and connectivity, and introduce performance-linked incentives (PLIs) for states to spur growth, she added.

According to South Asia’s leading travel trade daily, Tourism Breaking News, K Syama Raju, president, Federation of Hotels’ and Restaurants’ Association of India, said the move to develop 50 top tourist destinations in the country would spread across the country by attracting a larger number of visitors, which, in turn, would benefit the local communities.

Besides, the proposal to include hotels in the harmonious master list and granting of infrastructure status to the country’s hospitality sector would make access to cheaper, long-term financing easier, enabling hotels in these emerging destinations to upgrade their services and facilities to world-class standards.

Raju added that the ‘Heal in India’ initiative would put the spotlight on medical and wellness tourism and strengthen India’s standing as a global leader in healthcare. The introduction of visa fee waivers and e-visa options for certain sections of tourists would simplify the visa process and encourage travelers from across the world, he said. In addition, the National Geospatial Mission to improve mapping and spatial data would help in better planning and development of the tourism infrastructure.

Mudra Loans for Homestays

The government also plans to strengthen the country’s homestay businesses by providing collateral-free Mudra loans, enabling such small enterprises to expand services and assist local economic growth. The new tourism category, homestays, showed the great promise of growing at a compounded annual growth rate (CAGR) of 30%-40% over the next three-four years, Rajesh Magow, co-founder and group chief executive officer of online travel provider MakeMyTrip, told Business Standard.

The government would also continue to promote tourism to places of spiritual and religious significance as pointed out in the previous (July) Budget and there would be a special focus on destinations related to the life and teachings of Lord Buddha, the Finance Minister said in her speech.

(The author of this article is an award-winning Science Writer and a Defence, Aerospace & Political Analyst based in Bengaluru. He is also Director of ADD Engineering Components, India, Pvt. Ltd, a subsidiary of ADD Engineering GmbH, Germany. You can reach him at: girishlinganna@gmail.com)