Applications for the LAMP Fellowship 2025-26 will open on December 1, 2024. Sign up here to be notified when applications open.
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.
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.
As the dust settles around the 16th Lok Sabha, attention must now shift to the state assemblies, some of which have been newly constituted like Rajasthan, Chhattisgarh, Madhya Pradesh, Odisha, Andhra Pradesh and the few that will go into elections in the next few months like Maharashtra and Haryana. There are 30 state legislative assemblies not including the newly formed state of Seemandhara. In our federal structure, laws framed by the state assemblies are no less important and deserve the same diligence and debate as laws made by Parliament. A brief look in to the performance of some of our state assemblies reveals that these institutions which form the cornerstones of our democracy need some serious attention. State Assemblies: business hours The current Haryana Legislative Assembly that comes to the end of its five year term in October this year has held 10 sessions since 2009 till March 2014, meeting for a total of 54 days – an average of 11 days per year. In comparison, the Lok Sabha sat for an average of 69 days each year from 2009 to 2014. Among state assemblies, only Nagaland and Arunachal Pradesh sat for fewer days than Haryana. In the same period the Kerala Assembly sat for an average of 50 days per year, while Tamil Nadu Assembly sat for 44 days. In its previous term, the Gujarat Legislative Assembly sat for a total of 157 days – an average of 31 days each year. Similarly, the current Goa Legislative Assembly sat for 24 days in 2012 and for 39 days in 2013. Over the last 10 years, the Assembly sat for an average of 26 days a year. It recorded the highest number of sitting days in the last 10 years, at 39 days. Law making in the states In most states, Bills are passed with little or no discussion. Most Bills are introduced and passed on the last day of each session, which gives Members hardly any opportunity to examine or discuss legislation in detail. Unlike Parliament, where most Bills are referred to a department related standing committee which studies the Bill in greater detail, in most states such committees are non-existent. The exceptions are Kerala which has constituted subject committees for this purpose and states like Goa and Himachal Pradesh where Select Committees are constituted for important Bills. The current Haryana Assembly has passed 129 Bills, all of which were passed on the same day as they were introduced. Upto 23 Bills were passed on a single day, which left hardly any time for substantial discussion. In the twelfth Gujarat Assembly, over 90% of all Bills were passed on the same day as they were introduced. In the Budget Session of 2011, 31 Bills were passed of which 21 were introduced and passed within three sitting days. Of the 40 Bills passed by the Goa Assembly till May 2013, three Bills were referred to Select Committees. Excluding Appropriation Bills, the Assembly passed 32 Bills, which were taken up together for discussion and passing in five days. Almost all Bills were passed within three days of introduction. On average, each Bill was discussed for four minutes. In 2012, the West Bengal Legislative Assembly passed a total of 39 Bills, including Appropriation Bills. Most Bills were passed on the same day they were introduced in the Assembly. In 2011, a total of 23 Bills were passed. On average, five Members participated in the discussions on each Bill. In 2012, the Delhi Legislative Assembly passed 11 Bills. Only one of the 11 Bills was discussed for more than 10 minutes. The performance of the Chhattisgarh and Bihar Vidhan Sabhas follow the same pattern. Over the last few years, some assemblies such as Andhra Pradesh, Rajasthan and Haryana have taken some positive steps which include setting up subject committees and permitting live telecast of Assembly proceedings. Every legislator- in Parliament and the states - is accountable to his voter. Weak democratic institutions deprive legislators of their right to oversee the government as enshrined in the Constitution. Inadequate number of sitting days, lack of discussion on Bills, and passing of the Budget and demands for grants without discussion are symptoms of institutional ennui and do not do justice to the enormous import of these legislative bodies. Serious thought and public debate is needed to reinvigorate these ‘temples of democracy’ and provide elected representatives with the opportunity to exercise their right to legislative scrutiny, hold government to account, and represent their constituents.
