Civil Aviation, UID will be major beneficiaries in Budget

Air India and Unique Identification Authority of India (UIDAI) are set to be the major beneficiaries in the upcoming Budget to be presented on February 26. Officials said the maximum increase in government support would be for these two authorities even as inter-ministerial differences on equity infusion in Air India are far from settled. 

"The top beneficiaries in the Budget would be the Civil Aviation Ministry and UID project which will need a massive increase in funds to take off in the next financial year," an official source told Business Standard on condition of anonymity. 

Earlier, the Civil Aviation Ministry had demanded a gross budgetary support (GBS) of Rs 1,978 crore for the next financial year 2010-11, of which 60 per cent (Rs 1,200 crore) has been slotted for equity infusion in Air India. The demand is much more than the budgetary support to the ministry in Budget 2009 when the ministry got Rs 190 crore, though Parliament approved an additional Rs 800 crore for Air India during the supplementary demand for grants in December. 

Though the final allocation might be lesser than that what the Civil Aviation Ministry has asked for but the sector will be witnessing the maximum hike in its allocation, said an official. 

Another major beneficiary would be the UIDAI, headed by Nandan Nilekani, and falls within the ambit of the Ministry of Planning. According to sources, the Finance Ministry has agreed for a budgetary support of Rs 2,000 crore for the project in 2010-11 as against a token allocation of Rs 120 crore in the current financial year (2009-10). 

The Finance Ministry has settled for an increase of 15 per cent in the overall gross budgetary support (GBS) for 2010-11 which translates into a support of Rs 3.73 lakh crore. However, this is less that the 18 per cent which the planning commission had asked for earlier. The Finance Ministry is walking a tight rope with limited resources, however, the government is likely to prioritise thsese sectors over others in the Budget. 

The UID project which aims to provide unique identity numbers to 1.2 billion people is expected to come out with the first database for the project within the next financial year. The authority is expected to come out with the first batch of numbers by August 2010 and the second batch by February 2011. Even as the project is set to get a whopping 1,600 per cent increase in allocation, due to a low base, the actual cost of providing UID to 1.2 billion people is still being worked by the UIDAI. 

"The UID is a major project and is high on the agenda of the government so it is undoubtedly going to be the major beneficiary in the Budget as there has been no significant allocation for the project in the current fiscal," said another source requesting anonymity.

Moreover, it has already been stated that the first beneficiaries of the unique identity would be those who are benefitting from various government flagship schemes. Therefore, the project is high on the agenda of the government and is set to get a maximum hike in allocation over the previous year.