The first batch of B.Tech students will pass out in the next couple of months from six new IITs but they will not get their degrees unless Parliament passes an Amendment Bill.  M.Tech students who completed their course in IIT Hyderabad last year have not yet been awarded their degrees. The Institute of Technology (Amendment) Bill, 2010 is listed for consideration and passing in the Rajya Sabha on April 30, 2012 along with the National Institutes of Technology (Amendment) Bill, 2010.  Both Bills were passed in the Lok Sabha in 2011Both Bills confer the status of institutions of national importance to a number of new institutions, which implies that they have the power to award degrees (other technical institutions have to be affiliated with a university to be able to award degrees).  These institutions cannot award degrees until Rajya Sabha also passes the Bill, the President gives assent and the central government brings it into effect through a notification. Power to grant degrees The Ministry of HRD established six new Indian Institutes Technology (IITs) in 2008 and two in 2009.  It also established five new Indian Institutes of Science Education and Research (IISERs).  However, they are still awaiting for the power to be recognised as degree granting institutions.  Entry 64 of the Union List states that only Parliament can declare an institution to be an institution of national importance (see here and here).  Also, the University Grants Commission Act, 1956 states that the right to confer degrees can be exercised only by a university, deemed university or any institution specially empowered by an Act of Parliament to do so. According to news reports, students of the new IISERs who passed out in 2011 have not received their degrees because of the legislative delay.  Similar problems were reported by students in IIT-Benaras Hindu University.  The students of the new IITs, which were set up in 2008 would be passing out this year.  It is likely that they would face similar problems.  In fact, IIT-Hyderabad is already in the news for not being able to award degree to its Masters students. Highlights of the Bills The Institute of Technology (Amendment) Bill, 2010 amends the Institutes of Technology Act, 1961, which declares certain Institutes of Technology to be institutions of national importance by adding eight new Indian Institutes of Technology (IITs) in Bhubaneshwar, Gandhinagar, Hyderabad, Indore, Jodhpur, Mandi, Patna, Ropar.  It also seeks to integrate the Institute of Technology, Banaras Hindu University (BHU) within the ambit of the Act.  All these institutions shall be declared as institutions of national importance (see here for a Bill Summary). The Bill was referred to the Standing Committee on HRD, which raised a few issues with regard to lack of clarity about the zone in which IIT-BHU shall be operating, the need to preserve the autonomy of the IITs and the need to fulfil qualitative parameters before the new IITs could transform into institutes of national importance (see here for the Standing Committee Report and a Summary). The National Institutes of Technology (Amendment) Bill, 2010 amends the National Institutes of Technology Act, 2007 to add a schedule of five Indian Institutes of Science Education and Research (IISER) (established in Kolkata, Pune, Mohali, Bhopal and Thiruvananthapuram).  These institutions shall be declared to be institutions of national importance.  Currently, there are 20 institutions listed as institutions of national importance under the 2007 Act (see here for a Bill Summary). The Standing Committee Report on the Bill made a few recommendations: (a) the composition of the Board of Governors should be made more expert specific in with the mandate of IISERs; (b) IISER Council should have less number of Secretaries, and (c) details of the inter-disciplinary knowledge regime should strive toward flexibility and freedom in research (see here for the Standing Committee Report and a Summary).

The Airports Economic Regulatory Authority of India (Amendment) Bill, 2021 was passed by Parliament on August 4, 2021.  It amends the Airports Economic Regulatory Authority of India Act, 2008.  This Bill was introduced in Lok Sabha during the budget session this year in March 2021.  Subsequently, it was referred to the Standing Committee on Transport, Tourism, and Culture, which submitted its report on July 22, 2021.

Typically, cities have one civilian airport which provides all aeronautical services in that area.  These services include air traffic management, landing and parking of aircraft, and ground handling services.  This makes airports natural monopolies in the 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.  Hence, the Airport Economic Regulatory Authority (AERA) was established as an independent body under the 2008 Act to regulate tariffs and other charges (development fee and passenger service fee) for aeronautical services at major airports.  

For the remaining airports, these tariffs are determined by the Airports Authority of India (AAI), which is a body under the Ministry of Civil Aviation.  In addition, AAI leases out airports under the public-private partnership (PPP) model for operation, management, and development.  Before AERA was set up, AAI determined and fixed the aeronautical charges for all airports.  It also 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 a conflict of interest.

The 2008 Act designates an airport as a major airport if it has an annual passenger traffic of at least 35 lakh.  The central government may also designate any airport as a major airport through a notification.  The Bill adds that the central government may group airports and notify the group as a major airport.  Thus, when a small airport will be clubbed in a group and the group is notified as a major airport, its tariff will be determined by AERA instead of AAI.  Note that AERA will not determine the tariff if such tariff or tariff structures or the amount of development fees has been incorporated in the bidding document, which is the basis for the award of operatorship of that airport.

The amendments under the Bill raise some concerns regarding the grouping of airports and the capacity of the regulator.

  • Grouping of airports: The Statement of Objects and Reasons of the Bill states that government will club together profit-making and loss-making airports and offer them as a package in PPP mode to the prospective bidders.  This may be a policy decision to revive loss-making airports.  With the passage of the Bill, AERA will treat a group of airports as one entity.  One of the ways in which tariffs may be structured for the grouped entity would be through cross-subsidies.  This would involve compensating loss-making airports with the revenue generated from the profit-making airports.  If such a model is used, it may increase the cost of services to the end-consumers of profit-making airports or could reduce the profitability of such airports.  The experiences from other sectors such as electricity show that cross-subsidisation may lead to pricing problems in long term. 
     
  • Capacity of the regulator: AERA was created to provide a level playing field in the aviation sector and resolve the conflict of interest that arises with AAI both operating and regulating tariffs at airports.  During the examination of the AERA Bill, 2007 by the Standing Committee, the Ministry of Civil Aviation informed the Committee that AERA should regulate tariff and monitor performance standards only at major airports.  Depending upon future developments in the sector, and as the regulator built its capacity, other functions could be subsequently assigned to the regulator.

As of 2020, there are 125 operational airports in India (includes international airports, customs airports, and civil enclaves).  The number of airports under the purview of AERA increased from 11 in 2007 to 24 in 2019.  For the remaining airports, tariffs are still determined by AAI.  In the last five years (2014 to 2019), air passenger traffic increased from 11.3 crore to 34.9 crore (which is an annual growth rate of 10%).  Till 2030-31, air traffic in the country is expected to continue growing at an average annual rate of 10-11%

Before 2019, an airport with annual passenger traffic of at least 15 lakh was considered a major airport.  In 2019, the AERA Act was amended to increase this threshold to 35 lakh.  The Statement of Objects and Reasons of the 2019 Bill stated that the exponential growth of the aviation 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.  Consequently, in 2019, the number of airports under the purview of AERA was reduced.  Now, with the passage of the 2021 Bill, AERA will have to again regulate tariffs at more airports as and when notified by the central government.  Thus, the capacity of AERA may be needed to be enhanced for extending its scope to other airports.

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

Ahmedabad

Delhi  

Mumbai  

Amritsar  

Goa  

Patna  

Bengaluru  

Guwahati  

Pune  

Bhubaneswar     

Hyderabad  

Raipur  

Calicut  

Jaipur  

Thiruvananthapuram     

Chandigarh  

Kolkata  

Tiruchirappalli     

Chennai  

Lucknow  

Varanasi  

Cochin  

Mangalore  

Kannur 

Source: AERA website as accessed on August 2, 2021; PRS.