New Delhi, Feb 1 (IANS): The interim budget for the fiscal year 2024-25 has suggested a substantial reduction in budgetary allocations for the Ministry of Civil Aviation.

The proposed allocation stands at Rs 2,300 crore, a significant drop from the budget estimate of Rs 3,113.36 crore in the previous fiscal year 2023-24.

Breaking down the allocation, Rs 1,158.79 crore has been specifically designated for AI Asset Holdings Ltd, allocated for servicing loans transferred to the special purpose vehicle (SPV) as part of the financial restructuring of Air India.

This marks a decrease from the 2023-24 allocation of Rs 1,144.49 crore and a revised estimate of Rs 713.92 crore.

Furthermore, a noteworthy adjustment has been made in the provision for the medical benefits of retired Air India employees. The budget allocates Rs 85 crore for this purpose, a reduction from the previous year's allocation of Rs 130 crore but an increase from the revised estimate of Rs 51 crore.

Under the Internal and Extra Budgetary Resources (IEBR), the Airports Authority of India has been permitted to raise Rs 3,448.14 crore, a slight decrease from the previous allocation of Rs 3,448.21 crore but higher than the revised estimate of Rs 3,427.70 crore.

In a bid to bolster a specific scheme, the government has earmarked Rs 502 crore in the budget.

Although this marks a decrease from the budget estimate of Rs 1,244.07 crore in 2023-24, it remains higher than the revised estimate of Rs 850 crore.

Jaideep Mirchandani, Chairman Sky One, an aviation solutions company headquartered in Sharjah said that the 2024-25 budget paints an optimistic picture for India's aviation and tourism sectors.

"The government's attention to tourism projects in islands, including Lakshadweep, opens up exciting possibilities for both sectors. There's substantial potential in promoting tourism, especially spiritual tourism, and encouraging states to develop iconic tourist spots and launch new airlines on those routes is a welcome start. The escalating aspirations of the middle class to travel and explore align with the broader vision for the industry," he said.

"I commend the FM for her unwavering commitment to sabka saath, sabka vikas, sabka vishwas. I commend especially the increase in infrastructure spending that will have a multiplier effect on our economy," said Ajay Singh, CMD SpiceJet and President, Assocham.