Budget 2014: Air India to get Rs 6500 crore allocation

MUMBAI: The government has budgeted Rs 6,500 crore for national carrier Air India in the current fiscal year through March 31, as its latest tranche of equity infusion in the loss-making carrier.

The amount is higher than last year's tranche of Rs 6,000, but lower than the over Rs 7,000 support the airline had asked for.

The airline, loss-making since 2007, has been depending on cash handouts from the government to sustain operations.

Over the last couple of years, the airline has improved its finances. In the just ended financial year, the airline reduced its net loss to Rs 5,388.82 crore from Rs 5,490.16 crore in the prevous year. Revenue rose 15% to Rs 14,300 crore.

The carrier still accounts for the biggest share of industry losses.

Earlier in the day, India's finances minister Arun Jaitley proposed more airports in tier-II and tier-III cities in India and introduction of e-vias at nine airports in the country, while presenting the first fiscal budget of the Narendra Modi gover

According to the Economic Survey released yesterdy, the government plans to build 200 airports in small cities in the next twenty years

A growth in India's middle class and local businesses have led to rise in demand for air travel in small cities.

Lack of proper infrastructure at airports has however discouraged airlines from starting operations to such destinations.

India had in 2006 decided to modernise 35 non-metro airports. Of that 33 have been completed while work at Khajuraho and Vadodara is on, Jaitley said in the survey.

Facilitation of e-visas at airports will make clearances faster, likely attracting more tourists to the country.

The Narendra Modi government has said tourism shall be a key focus area for his government.