Union Budget Should Focus On Transport Sector As India’s Most Potential Growth Engine

By Nantoo Banerjee

India’s transport sector, combining road, rail, air and water, is ready for a significant job boom, with the logistics industry alone projected to grow at a 10.7 percent compound annual growth rate (CAGR) through the current year. The national budget for 2026-27, which is scheduled to be placed in Parliament on February 1, should strongly focus on the transport sector, especially on the under-tapped civil aviation field, and incentivize enthusiastic private entrepreneurs to play a growing role in this highly potential area of industry. The sector offers a tremendous opportunity to entrepreneurs – big, medium or small. The forthcoming budget should provide further stimulus to tap the opportunity, creating millions of new jobs, with the logistics sector specifically aiming to add up to 10 million job opportunities over the next two years.

There has been a big surge of private entrants in the transport sector alongside the traditional operators, led by the Tatas. Lately, the Adani Group is significantly expanding its transport sector footprint beyond airports, sea ports and shipping. The group is venturing into aircraft manufacturing, with Embraer of Brazil for regional jets, establishing major engine MRO (maintenance, repair, overhaul) and passenger-to-freighter conversion services. The Adani group is strengthening pilot training via its latest Rs.820-crore acquisition of a majority stake in the Flight Simulation Technique Centre (FSTC), the country’s leading independent pilot training provider, all supported by massive infrastructure investments to capitalize on India’s booming air travel demand. This holistic strategy positions Adani as a key player across the entire aviation value chain, complementing its existing airport operations.

Other major private entrepreneurs in the country’s transport sector include Vijay and Anand Sankeshwar-led VRL Logistics, Mahindra Logistics, Allcargo Logistics and innovators such as Sahil Barua’s Delhivery, Rajesh Yabaji’s Blackbuck, Blue Dart – all focusing on digital, express, and multimodal solutions, with figures like the Sankeshwars driving traditional road freight and newer tech founders transforming logistics. The industry is witnessing a high demand for logistics specialists, supply chain managers, warehouse managers, and delivery associates. Rapid adoption of electric vehicles (EVs) is driving hiring in battery technology, hydrogen fuel systems, and charging infrastructure development. The government’s production linked incentive (PLI) scheme for automobiles and auto components is expected to generate significant employment by the end of this year.

The ongoing large capital expenditure on highways, rural road connectivity, and modernisation of railways having dedicated freight corridors are boosting demand for engineers and construction personnel. Automation, Artificial Intelligence (AI), and Machine Learning (ML) are being integrated into logistics, driving demand for specialized tech roles. The logistics industry’s record growth is expected to create several million new jobs by the end of next year in sectors such as roadways, railways, airways, shipping, EV Manufacturing, Warehousing, and E-commerce. Among the major investment areas are roads and highways (aiming for 200,000 kms of national highway); private manufacturing of wagons, coaches, digital signalling, station redevelopment, DFC logistics parks; upgrading airports and creating new civil aviation enclaves such as Varanasi, Bihta and Bagdogra; development of dedicated container transshipment ports (Vizhinjam); and improving urban mobility through regional rapid transit systems and metro projects. The Bihta Airport is a new civil aviation hub being developed near Patna, expected to open around August, next year, featuring a large terminal with modern facilities and capacity for millions of passengers, aiming to boost regional connectivity for domestic and potentially international flights.

The country’s booming transport sector is leveraging robust public support and strategic policy to unlock substantial private capital for transformative infrastructure development, focusing on both physical assets and digital/sustainable solutions on a massive scale. The infrastructure construction market is fast expanding with the transport sector poised for a rapid and lasting boom and growing broader logistics market driven by public investment and digital initiatives like Gati Shakti, aiming to lower costs and boost multimodal transport, with roads dominating freight (around 70 percent) but air/waterways seeing rapid growth. The logistics sector is acting as a backbone for growth by creating millions of jobs, boosting trade competitiveness, attracting investment, and enabling the “Make in India” initiative through improved infrastructure, digitalization, and policy reforms, with projections showing significant growth towards a potential $800 billion market by 2030. By modernizing infrastructure, adopting technology, and streamlining policies, India’s logistics sector is poised to become a massive catalyst for sustained economic growth, supporting its ambition to become a developed economy.

Currently, the Indian aviation sector employs around 369,700 people directly. The domestic passenger market, the world’s third largest, can grow much faster with additional support from the government by encouraging more private participation and making land acquisition for new airports and for expansion of existing runways easy. Land acquisition remains a major hurdle for airport expansion, causing significant project delays, accounting for a large portion of unresolved infrastructure issues, and necessitating better compensation and resettlement strategies. Continued high demand for skilled professionals across various segments due to aggressive fleet expansion by airlines and the development of new airports poses another problem. Employment in the civil aviation sector is projected to exceed 25 million by 2047.

The continued expansion of the civil aviation sector is creating a high demand for talent across several specialized fields. The induction of new aircraft is driving consistent demand for pilots (especially captains and first officers), cabin crew, and flight operations personnel. Airport expansion under the UDAN scheme is increasing demand for ground staff, security personnel, operations coordinators, and cargo and logistics staff. There is a rising demand for licensed aircraft maintenance engineers and technicians. However, the industry is faced with a challenge in finding enough job-ready, skilled talent. There are significant annual shortfalls of pilots, aircraft maintenance technicians, and air traffic controllers. The long training lead times and high attrition rates mean employers are focusing on pipeline-based recruitment and continuous upskilling for professionals. Overall, the union budget, therefore, should support industry-wide capability building with training programmes linked to the transport sector, providing fiscal incentives for mechanisation and modern construction technologies (equipment pooling and leasing organisation), and structured skilling initiatives for operation and maintenance (O&M). A structured growth of the transport sector can change the face of the economy. The union budget should stay focussed on the growth of this sector. (IPA Service)

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