Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 on February 1, focusing heavily on improving air travel and road infrastructure. The government plans to make air travel easier to remote locations and support companies that make aircraft parts in India. A major highlight is the push for seaplanes to boost tourism and connectivity across the country.
New Scheme for Seaplanes and Local Manufacturing
The government has introduced a Viability Gap Funding (VGF) scheme specifically to support seaplane operations. This move aims to connect difficult terrains and boost tourism in the country. Apart from flying them, the government also wants companies to make these planes within India. Direct incentives were announced for manufacturing seaplanes that can seat between 9 to 30 passengers.
To make manufacturing cheaper, the Finance Minister announced that Basic Customs Duty (BCD) is now fully removed on parts needed to build civilian and training aircraft. This will help domestic companies who are working in this sector to produce planes at a lower cost.
Budget Allocations for Transport Sector
The government has increased the money given to various departments to speed up development. The regional connectivity scheme UDAN will get 27% more funds compared to last year. The road ministry also saw an 8% rise in its budget allocation to ensure better highway connectivity.
| Sector/Scheme | Allocation (2026-27) |
|---|---|
| MoRTH (Road Ministry) | ₹3.09 Lakh Crore |
| NHAI | ₹1.87 Lakh Crore |
| UDAN Scheme | ₹550 Crore |
| Civil Aviation Ministry (Net) | ₹2,102.87 Crore |
Tax Relief for MRO Sector
The Maintenance, Repair, and Overhaul (MRO) sector received a big relief in this budget. The government has exempted customs duty on raw materials imported for making parts used in repairing aircraft. This applies to both the civil and defense sectors.
This step is taken to reduce the reliance on foreign countries for aircraft maintenance and to save costs for airlines. The industry has welcomed this move as it will help in developing local capabilities for repairing planes.
