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Earlier this week, Rajya Sabha passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019, and the Bill is now pending in Lok Sabha.  The Bill amends the Airports Economic Regulatory Authority of India Act, 2008.  The Act established the Airports Economic Regulatory Authority of India (AERA).  AERA regulates tariffs and other charges for aeronautical services provided at civilian airports with annual traffic above 15 lakh passengers.  It also monitors the performance standard of services across these airports.  In this post, we explain the amendments that the Bill seeks to bring in and some of the issues around the functioning of the regulator.

Why was AERA created, and what is its role?

Few years back, private players started operating civilian airports.  Typically, airports run the risk of becoming a monopoly because cities usually have one civilian airport which controls all aeronautical services in that area.  To ensure that private airport operators do not misuse their monopoly, the need for an independent tariff regulator in the airport sector was felt.  Consequently, the Airports Economic Regulatory Authority of India Act, 2008 (AERA Act) was passed which set up AERA. 

AERA regulates tariffs and other charges (development fee and passenger service fee) for aeronautical services (air traffic management, landing and parking of aircraft, ground handling services) at major airports.  Major airports include civilian airports with annual traffic above 15 lakh passengers.  In 2018-19, there were 32 such airports (see Table 1).  As of June 2019, 27 of these are being regulated by AERA (AERA also regulates tariffs at the Kannur airport which was used by 89,127 passengers in 2018-19).  For the remaining airports, tariffs are determined by the Airports Authority of India (AAI), which is a body under the Ministry of Civil Aviation that also operates airports. 

What changes are being proposed in the Bill?

The Bill seeks to do two things:

Definition of major airports:  Currently, the AERA Act defines a major airport as one with annual passenger traffic over 15 lakh, or any other airports as notified by the central government.  The Bill increases the threshold of annual passenger traffic for major airports to over 35 lakh. 

Tariff determination by AERA:  Under the Act, AERA is responsible for determining the: (i) tariff for aeronautical services every five years, (ii) development fees, and (iii) passengers service fee.  It can also amend the tariffs in the interim period.  The Bill adds that AERA will not determine: (i) tariff, (ii) tariff structures, or (iii) development fees, in certain cases.  These cases include those where such tariff amounts were a part of the bid document on the basis of which the airport operations were awarded.  AERA will be consulted (by the concessioning authority, the Ministry of Civil Aviation) before incorporating such tariffs in the bid document, and such tariffs must be notified.

Why is the Act getting amended?

The Statement of Objects and Reasons of the Bill states that the exponential growth of the sector has put tremendous pressure on AERA, while its resources are limited.  Therefore, if too many airports come under the purview of AERA, it will not be able to perform its functions efficiently.  If the challenge for AERA is availability of limited resources, the question is whether this problem may be resolved by reducing its jurisdiction (as the Bill is doing), or by improving its capacity. 

Will the proposed amendments strengthen the role of the regulator?

When AERA was created in 2008, there were 11 airports with annual passenger traffic over 15 lakh.  With increase in passenger traffic across airports, currently 32 airports are above this threshold.  The Bill increases the threshold of annual passenger traffic for major airports to over 35 lakh.  With this increase in threshold, 16 airports will be regulated by AERA.  It may be argued that instead of strengthening the role of the regulator, its purview is being reduced. 

Before AERA was set up, the Airports Authority of India (AAI) fixed the aeronautical charges for the airports under its control and prescribed performance standards for all airports and monitored them.  Various committees had noted that AAI performed the role of airport operator as well as the regulator, which resulted in conflict of interest.  Further, there was a natural monopoly in airports and air traffic control.  In order to regulate the growing competition in the airline industry, and to provide a level playing field among different categories of airports, AERA was set up.  During the deliberations of the Standing Committee examining the AERA Bill, 2007, the Ministry of Civil Aviation had noted that AERA should regulate tariff and monitor performance standards only at major airports.  Depending upon future developments in the sector, other functions could be subsequently assigned to the regulator.

How would the Bill affect the regulatory regime?

Currently, there are 32 major airports (annual traffic above 15 lakh), and AERA regulates tariffs at 27 of these.  As per the Bill, AERA will regulate 16 major airports (annual traffic above 35 lakh).  The remaining 16 airports will be regulated by AAI.  Till 2030-31, air traffic in the country is expected to grow at an average annual rate of 10-11%.  This implies that in a few years, the traffic at the other 16 airports will increase to over 35 lakh and they will again fall under the purview of AERA.  This may lead to constant changes in the regulatory regime at these airports.  The table below provides the current list of major airports:

Table 1: List of major airports in India (as on March 2019) 

Airports with annual traffic above 35 lakh Airports with annual traffic between 15 and 35 lakh

Ahmedabad

Goa

Mumbai

Amritsar

Madurai*

Srinagar

Bengaluru

Guwahati

Patna

Bagdogra

Mangalore

Trichy*

Bhubaneswar

Hyderabad

Pune

Calicut

Nagpur

Varanasi

Chennai

Jaipur

Thiruvananthapuram

Chandigarh

Port Blair*

Vishakhapatnam

Cochin

Kolkata

 

Coimbatore

Raipur*

 

Delhi

Lucknow

 

Indore

Ranchi*

 

* - AERA does not regulate tariffs at these airports currently. 

Sources: AAI Traffic News; AERA website; PRS.

In response to the COVID-19 pandemic, the central and state governments have implemented several measures to reduce the spread of the disease and provide relief for those affected by the it.  In this blog, we look at some of the key measures taken by the Government of Chhattisgarh with regard to public health, ensuring supply of essential commodities and providing relief to affected persons.  

COVID-19 cases in the State

As of April 21, 2020, Chhattisgarh has 36 confirmed cases of COVID-19.  Of these, 11 are active cases, and 25 patients have been cured or discharged.   This is illustrated below in Figure 1. 

Figure 1: Day wise COVID-19 Cases in Chhattisgarh

 image

Sources: Ministry of Health and Family Welfare, Government of India; PRS.

Key measures taken by the State Government

On March 13, 2020, the Department of Health and Family Welfare notified the Chhattisgarh Epidemic Disease, COVID-19 Regulations, 2020.   Key provisions of the regulations include: 

  • The district collector can take necessary actions such as sealing geographical area of the district and ban vehicular movement, in order to prevent the spread of the epidemic.  Further, the district administration may take measures such as closure of schools, offices and banning public gatherings. 
     
  • In order to avoid rumours and unauthenticated information, no person or institution can use any print or electronic media for information regarding COVID-I9 without prior permission of Health Department.
     
  • All health facilities (including private) should have COVID-19 corners for screening of suspected cases.  Further, they should record travel history of a person if he has travelled to an area affected by COVID-19.  

Movement restrictions:  Following these regulations, the government announced several additional measures to restrict movement of people to contain the spread of COVID-19.

  • On March 19, the Transport department stopped running of all inter-state buses in the state to restrict movement to and from the state.  On March 21, all city bus services in urban areas of the state were suspended. This was followed by stoppage of all transport including auto, taxi and e-rickshaws.
     
  • On March 22, the government announced a lockdown in all urban areas of the state till March 31 during which all offices, institutions and other activities were to remain closed.   Essential services such as medical shops, vegetable shops, petrol pumps, electricity and water supply services were open.    
         
  • On March 25, the central government announced on a 21-day country-wide lockdown till April 14.  On April 14, the lockdown was further extended till May 3, 2020. 

Essential Goods and Services: Following the lockdown, the government notified certain additional essential goods and services that will remain unaffected by the lockdown.   These are noted below:  

  • On March 13, 2020, the central government notified hand sanitisers, surgical masks and N-95 masks as Essential Commodities.  This implies that the government can regulate the product, supply and pricing of these items.   Following this, the state government notified that the district administration should monitor the price of surgical masks, N-95 masks and hand sanitisers in each district of the state.
     
  • On March 24, the state department of Food and Public Distribution notified certain additional essential goods and services under the Essential Commodities Act, 1955.  These include: (i) wheat and rice mills, (ii) operations of items used in acquirement or storage of items under the Public Distribution System, such as fertilisers, (iii) supply of Petrol, Diesel, CNG and LPG, among others.
     
  • On April 15, the Ministry of Home Affairs issued guidelines on the measures to be taken by state governments until May 3.  As per these guidelines, select activities will be permitted in less-affected districts from April 20 onwards to reduce the hardships faced by people.  Permitted activities include: (i) health services such as hospitals, clinics, and vets, (ii) agriculture and related activities such as fisheries and plantations, (iii) MNERGA work, (iv) construction activities, and (v) industrial establishments.

Relief measures:  During the lockdown, the state government announced several measures to provide relief to the affected individuals.  Key measures include: 

  • Rice for two months will be provided in April to all beneficiaries under the Public Distribution System.  Antyodaya & Annapurna ration card holders will also get sugar and salt for two months in April.  Two quintal of rice is allocated to every gram panchayat, which can be utilised for distribution to individuals without ration cards, subject to a maximum of 5 kg for an individual. 
     
  • 4 kg of rice at primary level and 6 kg at upper primary level will be provided to school children under the Mid-day Meal Scheme, on account of closure of schools.  Further, arrangements will be made to provide ready to eat take home rations for undernourished children between the age of 3 to 6 at Aanganwadi centres.  
  • The government approved sanction of MLA funds for corona virus prevention and other necessary arrangements and support.  The Chief Minister announced that there will be no mandatory deduction from salaries of state government officials and employees for pandemic relief. 
     
  • The state’s Labour Department sanctioned Rs 3.8 crore to aid labourers affected due to lockdown. 
     
  • Pending taxes, interest and penalties of bus and truck operators of nearly Rs 331 crore to be waived off.  

Health Measures:  Over the last few weeks, the government issued several guidelines and orders on containment of the virus, patient handling and protection of healthcare workers.  Some of these are noted below:

  • On March 23, the government of Chhattisgarh declared Corona Virus as a "Notified Infectious Disease" under the Chhattisgarh Public Health Act, 1949.  Further, it notified measures to be taken for prevention of spread of COVID-19 at industries and workplaces.  These included restricting the number of employees at workplaces, and ensuring sanitisation at workplace.  
     
  • Guidelines regarding bio-medical waste in quarantine homes and camps were notified.  These guidelines provide that all workers involved in waste collection should be provided with personal protective equipment.  Further, vehicles carrying such waste should be sanitised with 1% hypochlorite after every trip. 
     
  • On April 11, the Department of Health and Family Welfare made it mandatory to wear a mask for all persons while stepping out of their house for any public place. 
     
  • The department also released guidelines for patients cured of COVID-19.  These guidelines provide that such persons should be escorted to their home district from the hospital and regular monitoring and supervision of their health should be ensured by the district administration.   
     
  • Further, the department released guidelines for continuation of other hospital services during COVID-19 outbreak.  The guidelines provide that the patients should be advised on phone as far as possible, and should be given separate timings for in-person appointments to avoid congestion at hospitals.  On April 18, the Chief Minister announced an online health consultation website for patients, through which patients can seek free of cost advice from doctors.   

For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.