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On September 14, 2012, the central government announced that foreign airlines would now be allowed to invest up to 49% in domestic airlines. Under the policy announced by the government, the ceiling of 49% foreign investment includes foreign direct investment and foreign institutional investment. Prior to investing in a domestic airline, foreign airlines would have to take approval of the Foreign Investment Promotion Board. Additionally, the applicant will also be required to seek security clearance from the Home Ministry. In 2000, the government first permitted foreign direct investment up to 40% in the domestic airline sector. However, no foreign airline was allowed to invest either directly or indirectly in the domestic airlines industry. Non Resident Indians were permitted to invest up to 100%. Furthermore, the foreign investor was required to take prior approval of the government before making the investment. Subsequently, the central government eased the foreign investment norms in this sector. As of April 2012, foreign direct investment is permitted in all civil aviation sectors. The Civil Aviation sector in India includes airports, scheduled and non-scheduled domestic passenger airlines, helicopter services / seaplane services, ground handling Services, maintenance and repair organizations, flying training institutes, and technical training institutions. Foreign airlines were not permitted to invest either directly or indirectly in domestic passenger airlines. However, they are permitted to invest in cargo companies and helicopter companies. Investment by foreign airlines in the domestic airline industry has been a long standing demand of domestic airlines. According to the Report of the Working Group on Civil Aviation for formulation of twelfth five year plan (2012-17), India is currently the 9th largest civil aviation market in the world. Between 2008 and 2011, passenger traffic (domestic and international) and freight traffic increased by a compounded annual growth rate of 7% and 11% respectively. The traffic growth (passenger and freight) at 18% exceeded the growth rate seen in China (9.7%) and Brazil (7.5%), and was higher than the global growth rate of 3.8%. According to the Centre for Civil Aviation, until February 2012, India had the second highest domestic air traffic growth. However, due to the crisis faced by Air India and Kingfisher, the passenger numbers have declined in June-July 2012. India was the only major domestic market that failed to show an expansion in demand in June 2012, as compared to the previous year. Despite the rapid growth, the financial performance of airlines in India has been poor. According to the Report of the Working Group on Civil Aviation, the industry is expected to have a debt burden of approximately USD 20 billion in 2011-2012. According to the same report, during the period 2007-2010 India's airlines suffered an accumulated loss of Rs 26,000 crores. According to the government, investment by foreign airlines shall bring in the much needed funds and expertise required by the domestic industry. However, as per to some analysts, foreign investment alone cannot solve the problem. According to them, the major cost impacting the growth of the industry is the high cost of Aviation Turbine Fuel. As per the press release by the government on June 6, 2012, ATF accounts for 40% of the operating cost of Indian carriers. In comparison, fuel constitutes only 20% of the cost for international carriers. ATF in India is priced, on an average, 60% higher than international prices. This is due to the high rate of taxation imposed on ATF by some states. In most states, the VAT on ATF is around 25-30%.
As of May 4, 2020, there are 42,533 confirmed cases of COVID-19 in India. Since April 27, 14,641 new cases have been registered. Out of the confirmed cases so far, 11,707 patients have been cured/discharged and 1,373 have died. As the spread of COVID-19 has increased across India, the central government has continued to announce several policy decisions to contain the spread, and support citizens and businesses who are being affected by the pandemic. In this blog post, we summarise some of the key measures taken by the central government in this regard between April 27 and May 4, 2020.
Source: Ministry of Health and Family Welfare; PRS.
Lockdown
Extension of lockdown until May 18, 2020
The Ministry of Home Affairs passed an order extending the lockdown for two weeks from May 4, 2020 (until May 18, 2020). Activities that remain prohibited in the extended lockdown include:
Travel and movement: Passenger movement by: (i) air (except for medical and security purposes), (ii) trains (except for security purposes), (iii) inter-state buses (unless permitted by central government), and (iv) metro, remains prohibited. Inter-state movement of individuals is also prohibited except for medical reasons or if permitted by the central government. Intra-state movement of persons for all non-essential activities will remain prohibited between 7pm and 7am.
Education: All educational institutions such as schools and colleges will remain closed except for online learning.
Hospitality services and recreational activities: All hospitality services such as hotels will remain closed except those being used as quarantine facilities, or those housing persons such as healthcare workers, police, or stranded persons. Further, recreational facilities such as cinemas, malls, gyms, and bars will remain closed.
Religious gatherings: All religious spaces will remain closed and congregation for religious purposes will remain prohibited.
The revised guidelines for the lockdown include risk-profiling of districts into red, green and orange zones. Zone classifications will be decided by the Ministry of Health and Family Welfare and shared with states on a weekly basis. States may include additional districts as red or orange zones. However, they may not lower the classification of any district. For a district to move from a red zone to an orange zone, or from an orange zone to a green zone, it must have no new cases for 21 days. Classification of and activities permitted in the zones include:
Red zones or hotspots: These districts will be identified based on the total number of active cases, doubling rate of confirmed cases, and testing and surveillance feedback. Additional activities prohibited in red zones include: (i) cycle and auto rickshaws, (ii) taxis, (iii) buses, and (iv) barber shops, spas and salons. Activities that are permitted include: (i) movement of individuals (maximum two persons in four wheelers, and one person in two wheelers), (ii) all industrial establishments in rural areas and certain industrial establishments in urban areas such as manufacturing of essential goods, and (iii) all standalone and neighbourhood shops.
Green zones: These zones include districts with no confirmed cases till date or no confirmed cases in the last 21 days. No additional activities are prohibited in these zones. In addition to activities permitted in red zones, buses can operate with up to 50% seating capacity.
Orange zones: These zones include all districts that do not fall in either red or green zones. Inter and intra-state plying of buses is prohibited in these zones. Activities that are permitted (in addition to those permitted in red zones) include: (i) taxis with a maximum of one driver and two passengers, (ii) inter-district movement of individuals and vehicles for permitted activities, and (iii) four wheeler vehicles with a maximum of one driver and two passengers.
Certain areas within red and orange zones will be identified as containment zones by the district administration. Containment zones may include areas such as residential colonies, towns, or municipal wards. In containment zones, local authorities must ensure 100% coverage of Aarogya Setu App, contract tracing, quarantine of individuals based on risk, and house to house surveillance. Further, movement of persons in or out will be prohibited except for medical emergencies and essential goods, amongst other measures.
Movement of stranded persons
The Ministry of Home Affairs has permitted the movement of migrant workers, pilgrims, tourists, students, and other stranded persons, by special trains. To facilitate this, all states and union territories will designate nodal authorities for sending, receiving, and registering stranded persons. The state sending persons and the state receiving persons both need to agree to the exchange. Each train can carry up to 1,200 persons and no train may run at less than 90% capacity. Passengers approved for travel by the state governments may be required to pay some part of the ticket fare.
Education
UGC issues guidelines on examinations and the academic calendar for universities
The University Grants Commission (UGC) issued guidelines on examinations and the academic calendar for universities in view of the COVID-19 pandemic.
Academic Calendar: Classes for the even semester in universities were suspended from March 16, 2020 onwards. The guidelines prescribe that online teaching must continue till May 31 through social media (WhatsApp / YouTube), emails, or video conferencing. The examinations for the current academic year should be held in July, 2020 and the results for the same should be declared by July 31 (for terminal year students) and by August 14 (for intermediate year students)
The Academic Session 2020-21 may commence from August 2020 for old students and from September 2020 for fresh students. The admission process for the fresh students can be done in August. Consequently, the commencement of even semester for 2020-21 can be from January 27, 2021. The commencement of academic session 2021-22 may be from August 2021. The universities may follow a 6-day week pattern to compensate the loss of teaching for the remaining session of 2019- 20 and the 2020-21 academic session.
Examination: The universities may conduct semester or yearly examinations in offline or online mode. This has to be done while observing the guidelines of “social distancing” and ensuring fair opportunity for all students. They may adopt alternative, simplified methods of examinations such as multiple choice questions based examinations or open book examination. If examinations cannot be conducted in view of the prevailing situation at the time, grading may be done on the basis of internal assessments and performance in previous semester. The universities may conduct the Ph.D viva examinations through video conferencing.
Other guidelines: Every University should establish a COVID-19 cell for handling student grievances related to examinations and academic activities during the pandemic and notify effectively to the students. Further, a COVID-19 cell will be created in the UGC for faster decision making.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
