India’s Act East policy is often presented as a strategic inevitability — a recalibration of economic gravity towards Southeast Asia, anchored in geography and propelled by connectivity. Yet geography cuts both ways.
Without a robust aviation backbone in the Northeast, Act East risks remaining a cartographic aspiration rather than an operational strategy. The Union Budget 2026–27, when read beyond its headline assurances and examined through the arithmetic of allocations and revisions, exposes precisely this contradiction: the Northeast is central to India’s eastern imagination, but peripheral to its aviation balance sheet.
The Ministry of Civil Aviation’s allocation for 2026–27 stands at ₹3,378 crore, a nominal 3.4 per cent increase over the previous year’s Budget Estimate of ₹3,266 crore. On paper, this signals continuity.
In practice, it follows a sharp execution-stage contraction in 2025–26, when allocations were revised down to ₹3,050 crore, a 6.6 per cent cut from the original estimate. Measured against this revised base, the new allocation merely restores a portion of what was withdrawn mid-year. Capacity expansion, particularly in regions dependent on public aviation infrastructure, remains elusive.
For the Northeast, this volatility between intent and execution is not a technical footnote. Aviation here is not a premium service responding to market demand; it is a foundational public utility shaped by terrain, weather, and distance. When allocations fluctuate at the Revised Estimate stage, connectivity itself becomes contingent.
This dynamic is clearest in the Regional Connectivity Scheme (UDAN), which was designed to compensate for precisely such market failures. In 2025–26, UDAN was budgeted at ₹1,244 crore, only to be revised down to roughly ₹1,110 crore, an 11 per cent reduction.
The 2026–27 allocation of around ₹1,200 crore does not return the scheme to its original funding trajectory. For Northeastern routes — which require sustained viability gap funding rather than temporary support — this plateauing effectively caps connectivity rather than deepening it.
The Finance Minister’s budget speech speaks of “balanced regional development” and the imperative that “growth reaches the last mile”. Yet aviation budgeting continues to assume that regional routes will eventually converge towards commercial viability. This assumption may hold in dense, urbanised corridors; it collapses in Arunachal Pradesh, Mizoram, or Nagaland, where aviation substitutes for missing road, rail, and river connectivity rather than complementing them.
The most consequential evidence of this structural bias lies in the capital expenditure of the Airports Authority of India (AAI), which manages most Northeastern airports. In 2025–26, AAI’s capital outlay was ₹4,500 crore at the BE stage, only to be cut to ₹3,900 crore at RE, a steep 13 per cent contraction. The 2026–27 BE restores capex to about ₹4,200 crore, still ₹300 crore below the earlier peak.
Because AAI rationalises spending by traffic volume and commercial returns, such mid-year compression is spatially uneven. Metro airports retain momentum; peripheral but strategic airports absorb delay.
This is not incidental. Terminal expansion, apron strengthening, and night-landing upgrades at Silchar, Dibrugarh, Tezpur, and Pasighat were among projects slowed or deferred following the 2025–26 revisions. In fiscal terms, this is how consolidation quietly acquires a geography.
The contradiction sharpens when aviation budgets are juxtaposed with Act East rhetoric. Assam is repeatedly projected as India’s gateway to Southeast Asia, yet Guwahati airport — handling over six million passengers annually — has not seen commensurate investment in cargo handling, maintenance-repair-overhaul facilities, or multimodal integration.
Traffic has recovered and grown; fiscal support has not scaled with it. Assam is expected to function as a hub without the capital intensity normally associated with hub development.
For smaller states, the margins are even thinner. Airports such as Hollongi, Pasighat, Lengpui, and Dimapur operate with operating and capital budgets so constrained that ₹20–30 crore adjustments at the Revised Estimate stage can stall an entire construction cycle.
Against a total Union expenditure of ₹53.47 lakh crore, civil aviation accounts for barely 0.06 per cent. Within this already narrow envelope, modest aggregate cuts translate into absolute standstills in the Northeast.
This fiscal fragility carries implications that extend well beyond civilian mobility. Along the Line of Actual Control in Arunachal Pradesh, road connectivity remains seasonal, rail penetration embryonic, and inland waterways limited.
Airports such as Hollongi and Pasighat are therefore not auxiliary assets but the backbone of year-round logistics, disaster response, and administrative reach. In Assam, Tezpur, straddling the civil–military divide, anchors the Brahmaputra valley’s linkage to forward regions, yet remains exposed to the same capex volatility as low-traffic civilian airports elsewhere.
Across the border, China has integrated civilian airports in Tibet into a stable, dual-use logistics grid supported by predictable funding horizons. India need not replicate that model. But treating aviation in its eastern borderlands as fiscally discretionary, rather than strategically foundational, erodes logistical depth by default rather than design.
Budget 2026–27 does not overtly cut aviation spending for the Northeast. It does something subtler and more enduring: it normalises uncertainty, relying on execution-stage compression to reconcile ambition with fiscal restraint, knowing that politically light, geographically difficult regions will absorb the adjustment.
As long as aviation for the Northeast is financed as a residual rather than as strategic infrastructure, India’s Act East policy will remain airborne in speeches — and grounded in arithmetic.
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