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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. 

In the recent past, there has been a renewed discussion around nutrition in India.  A few months ago, the Ministry of Health and Family Welfare had released the National Health Policy, 2017.[1]  It highlighted the negative impact of malnutrition on the population’s productivity, and its contribution to mortality rates in the country.  In light of the long term effects of malnutrition, across generations, the NITI Aayog released the National Nutrition Strategy this week.  This post presents the current status of malnutrition in India and measures proposed by this Strategy.

What is malnutrition?

Malnutrition indicates that children are either too short for their age or too thin.[2]  Children whose height is below the average for their age are considered to be stunted.  Similarly, children whose weight is below the average for their age are considered thin for their height or wasted.  Together, the stunted and wasted children are considered to be underweight – indicating a lack of proper nutritional intake and inadequate care post childbirth.

What is the extent of malnutrition in India?

India’s performance on key malnutrition indicators is poor according to national and international studies.  According to UNICEF, India was at the 10th spot among countries with the highest number of underweight children, and at the 17th spot for the highest number of stunted children in the world.[3]

Malnutrition affects chances of survival for children, increases their susceptibility to illness, reduces their ability to learn, and makes them less productive in later life.[4]   It is estimated that malnutrition is a contributing factor in about one-third of all deaths of children under the age of 5.[5]  Figure 1 looks at the key statistics on malnutrition for children in India.

Figure 1: Malnutrition in children under 5 years (2005-06 and 2015-16)

NFHS Survey

Sources: National Family Health Survey 3 & 4; PRS.

Over the decade between 2005 and 2015, there has been an overall reduction in the proportion of underweight children in India, mainly on account of an improvement in stunting.  While the percentage of stunted children under 5 reduced from 48% in 2005-06 to 38.4% in 2015-16, there has been a rise in the percentage of children who are wasted from 19.8% to 21% during this period.[6],[7]  A high increase in the incidence of wasting was noted in Punjab, Goa, Maharashtra, Karnataka, and Sikkim.[8]

The prevalence of underweight children was found to be higher in rural areas (38%) than urban areas (29%). According to WHO, infants weighing less than 2.5 Kg are 20 times more likely to die than heavier babies.2  In India, the national average weight at birth is less than 2.5 Kg for 19% of the children.  The incidence of low birth-weight babies varied across different states, with Madhya Pradesh, Rajasthan and Uttar Pradesh witnessing the highest number of underweight childbirths at 23%.[9]

Further, more than half of India’s children are anaemic (58%), indicating an inadequate amount of haemoglobin in the blood.  This is caused by a nutritional deficiency of iron and other essential minerals, and vitamins in the body.2

Is malnutrition witnessed only among children?

No.  Among adults, 23% of women and 20% of men are considered undernourished in India.  On the other hand, 21% of women and 19% of men are overweight or obese.  The simultaneous occurrence of over nutrition and under-nutrition indicates that adults in India are suffering from a dual burden of malnutrition (abnormal thinness and obesity).  This implies that about 56% of women and 61% of men are at normal weight for their height.

What does the National Nutrition Strategy propose?

Various government initiatives have been launched over the years which seek to improve the nutrition status in the country.  These include the Integrated Child Development Services (ICDS), the National Health Mission, the Janani Suraksha Yojana, the Matritva Sahyog Yojana, the Mid-Day Meal Scheme, and the National Food Security Mission, among others.  However, concerns regarding malnutrition have persisted despite improvements over the years.  It is in this context that the National Nutrition Strategy has been released.  Key features of the Strategy include:8

  • The Strategy aims to reduce all forms of malnutrition by 2030, with a focus on the most vulnerable and critical age groups. The Strategy also aims to assist in achieving the targets identified as part of the Sustainable Development Goals related to nutrition and health.
  • The Strategy aims to launch a National Nutrition Mission, similar to the National Health Mission. This is to enable integration of nutrition-related interventions cutting across sectors like women and child development, health, food and public distribution, sanitation, drinking water, and rural development.
  • A decentralised approach will be promoted with greater flexibility and decision making at the state, district and local levels. Further, the Strategy aims to strengthen the ownership of Panchayati Raj institutions and urban local bodies over nutrition initiatives.  This is to enable decentralised planning and local innovation along with accountability for nutrition outcomes.
  • The Strategy proposes to launch interventions with a focus on improving healthcare and nutrition among children. These interventions will include: (i) promotion of breastfeeding for the first six months after birth, (ii) universal access to infant and young child care (including ICDS and crèches), (iii) enhanced care, referrals and management of severely undernourished and sick children, (iv) bi-annual vitamin A supplements for children in the age group of 9 months to 5 years, and (v) micro-nutrient supplements and bi-annual de-worming for children.
  • Measures to improve maternal care and nutrition include: (i) supplementary nutritional support during pregnancy and lactation, (ii) health and nutrition counselling, (iii) adequate consumption of iodised salt and screening of severe anaemia, and (iv) institutional childbirth, lactation management and improved post-natal care.
  • Governance reforms envisaged in the Strategy include: (i) convergence of state and district implementation plans for ICDS, NHM and Swachh Bharat, (ii) focus on the most vulnerable communities in districts with the highest levels of child malnutrition, and (iii) service delivery models based on evidence of impact.

[1] National Health Policy, 2017, Ministry of Health and Family Welfare, March 16, 2017, http://mohfw.nic.in/showfile.php?lid=4275

[2] Nutrition in India, Ministry of Health and Family Welfare, 2005-06, http://rchiips.org/nfhs/nutrition_report_for_website_18sep09.pdf

[3] Unstarred Question No. 2759, Lok Sabha, Answered on March 17, 2017, http://164.100.47.190/loksabhaquestions/annex/11/AU2759.pdf

[4] Helping India Combat Persistently High Rates of Malnutrition, The World Bank, May 13, 2013, http://www.worldbank.org/en/news/feature/2013/05/13/helping-india-combat-persistently-high-rates-of-malnutrition

[5] Unstarred Question No. 4902, Lok Sabha, Answered on December 16, 2016, http://164.100.47.190/loksabhaquestions/annex/10/AU4902.pdf

[6] National Family Health Survey – 3, 2005-6, Ministry of Health and Family Welfare http://rchiips.org/nfhs/pdf/India.pdf

[7] National Family Health Survey – 4 , 2015-16, Ministry of Health and Family Welfare, http://rchiips.org/NFHS/pdf/NFHS4/India.pdf

[8] National Nutrition Strategy, 2017, NITI Aayog, September 2017, http://niti.gov.in/writereaddata/files/document_publication/Nutrition_Strategy_Booklet.pdf

[9] Rapid Survey On Children, Ministry of Women and Child Development, 2013-14, http://wcd.nic.in/sites/default/files/RSOC%20National%20Report%202013-14%20Final.pdf