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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.
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 light of recent debates surrounding the implementation of the Mid Day Meal Scheme (MDMS) in certain states, it is useful to understand the basic features of the scheme. The MDMS is the world’s largest school meal programme and reaches an estimated 12 crore children across 12 lakh schools in India. A brief introduction follows, outlining the key objectives and provisions of the scheme; modes of financing; monitoring and evaluation mechanisms and issues with implementation of the scheme. Examples of 'best practices' and major recommendations made by the Planning Commission to improve the implementation of the scheme are also mentioned. Provisions: The MDMS emerged out of the National Programme of Nutritional Support to Primary Education (NP – NSPE), a centrally sponsored scheme formulated in 1995 to improve enrollment, attendance and retention by providing free food grains to government run primary schools. In 2002, the Supreme Court directed the government to provide cooked mid day meals (as opposed to providing dry rations) in all government and government aided primary schools.[1] Calorie norms for the meals have been regularly revised starting from 300 calories in 2004, when the scheme was relaunched as the Mid Day Meal Scheme. At present the MDMS provides children in government aided schools and education centres a cooked meal for a minimum of 200 days.[2] Table 1 outlines the prescribed nutritional content of the meals. Table 1: Prescribed nutritional content for mid day meals
Item | Primary (grade 1-5) | Upper Primary(grade 6-8) |
Calories | 450 | 700 |
Protein (in grams) | 12 | 20 |
Source: Annual Report, 2011 – 12, Ministry of Human Resource Development, Government of India; PRS. Objectives: The key objectives of the MDMS are to address the issues of hunger and education in schools by serving hot cooked meals; improve the nutritional status of children and improve enrollment, attendance and retention rates in schools and other education centres. Finances: The cost of the MDMS is shared between the central and state governments. The central government provides free food grains to the states. The cost of cooking, infrastructure development, transportation of food grains and payment of honorarium to cooks and helpers is shared by the centre with the state governments. The central government provides a greater share of funds. The contribution of state governments differs from state to state. Table 2 outlines the key areas of expenditure incurred by the central government under the MDMS for the year 2012 – 2013. Table 2: Key areas of expenditure in the MDMS (2012 - 2013)
Area of expenditure | Percentage of total cost allocated |
Cooking cost | 53 |
Cook / helper | 20 |
Cost of food grain | 14 |
Transportation assistance | 2 |
Management monitoring and evaluation | 2 |
Non recurring costs | 10 |
Source: Ministry of Human Resource Development; Fourth NSCM Committee meeting, August 24, 2012; PRS. Monitoring and Evaluation: There are some inter state variations in the monitoring and evaluation mechanisms of the MDMS. A National Steering cum Monitoring Committee and a Programme Approval Board have been established at the national level, to monitor the programme, conduct impact assessments, coordinate between state governments and provide policy advice to central and state governments. Review Missions consisting of representatives from central and state governments and non governmental agencies have been established. In addition, independent monitoring institutions such as state universities and research institutions monitor the implementation of the scheme. At the state level, a three tier monitoring mechanism exists in the form of state, district and block level steering cum monitoring committees. Gram panchayats and municipalities are responsible for day to day supervision and may assign the supervision of the programme at the school level to the Village Education Committee, School Management and Development Committee or Parent Teacher Association. Key issues with implementation: While there is significant inter-state variation in the implementation of the MDSM, there are some common concerns with the implementation of the scheme. Some of the concerns highlighted by the Ministry for Human Resource Development based on progress reports submitted by the states in 2012 are detailed in Table 3. Table 3: Key implementation issues in the MDMS
Issue | State(s) where these problems have been reported |
Irregularity in serving meals | Karnataka, Madhya Pradesh, Orissa, Rajasthan, Maharashtra, Arunachal Pradesh |
Irregularity in supply of food grains to schools | Orissa, Maharashtra, Tripura, Karnataka, Arunachal Pradesh, Meghalaya, Delhi, Andhra Pradesh |
Caste based discrimination in serving of food | Orissa, Rajasthan, Madhya Pradesh |
Poor quality of food | Rajasthan, Tamil Nadu, Delhi, Chhattisgarh |
Poor coverage under School Health Programme | Orissa, Jharkhand, Madhya Pradesh, Rajasthan, Uttar Pradesh, Manipur, Arunachal Pradesh, Himachal Pradesh, Chhattisgarh |
Poor infrastructure (kitchen sheds in particular) | Andhra Pradesh, Tamil Nadu, Puducherry, Gujarat, Chandigarh, Himachal Pradesh, Jammu and Kashmir, Orissa |
Poor hygiene | Delhi, Rajasthan, Puducherry, |
Poor community participation | Most states – Delhi, Jharkhand, Manipur, Andhra Pradesh in particular |
Source: Ministry of Human Resource Development; PRS. Best practices: Several state governments have evolved practices to improve the implementation of the MDMS in their states. These include involving mothers of students in implementation of the scheme in Uttarakhand and Jharkhand; creation of kitchen gardens, i.e., food is grown in the premises of the school, in Andhra Pradesh, Karnataka, Punjab and West Bengal; construction of dining halls in Tamil Nadu; and increased community participation in the implementation of the scheme Gujarat. More information is available here. Planning Commission evaluation of MDMS: In 2010, a Planning Commission evaluation of the MDMS made the following recommendations to improve implementation of the scheme: i. Steering cum monitoring committees at the district and block levels should be made more effective. ii. Food grains must be delivered directly to the school by the PDS dealer. iii. The key implementation authority must be made responsible for cooking, serving food and cleaning utensils, and school staff should have a supervisory role. The authority should consist of local women’s self help groups or mothers of children studying in the schools. iv. Given the fluctuating cost of food grains, a review of the funds allocated to the key implementation authority must be done at least once in 6 months. v. Services might be delivered through private providers under a public private partnership model, as has been done in Andhra Pradesh.
[1] PUCL vs. Union of India, Writ Petition (Civil) 196 of 2001. [2] The following institutions are covered: Government and government aided schools, National Child Labour Project (NCLP) schools, Education Guarantee Scheme (EGS) and Alternative and Innovative Education (AIE) centres including Madrasas and Maqtabs supported under the SSA