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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. 

With the spread of COVID-19, along with the central government, state governments have also announced several policy decisions to contain and prevent the spread of the virus.  In this blog post, we summarise some of the key measures taken by the government of West Bengal in this regard as of April 18, 2020. 

As of April 18, 2020, there have been 287 confirmed cases of COVID-19 in West Bengal. Of these, 55 have been discharged and 10 have died.  To manage patients, there are 66 COVID hospitals, eight testing laboratories, and 582 institutional quarantine centres in the state. 

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Early response: Leading up to lockdown

Between January and February, the state government's efforts were aimed at raising awareness among citizens on COVID-19.  These include advisories on observing precautionary measures, and informing citizens on travel restrictions, home isolation, and screening protocols for foreign returnees.

On March 2, the state government responded to the growing number of suspected cases by issuing guidelines for preparedness by government medical colleges and hospitals.   These covered admission, isolation and management of suspected COVID-19 cases.  These instructions were extended to private medical colleges and hospitals on March 7.  A week later, the government issued protocols for monitoring travellers at various state checkposts by joint teams of state police and paramedical staff, and for reference of symptomatic patients to isolation facilities in the district.  All cases had to be reported on a daily basis to district surveillance teams.  The government also announced the closure of all educational institutions in the state (government and private) till March 31.  

On March 16, the government notified the West Bengal Epidemic Disease COVID-19 Regulations, 2020.  These regulations specify screening and treatment protocol for COVID-19 patients, and empower the district administration to take containment measures to curb the spread of COVID-19.   

The next day, the state reported its first confirmed case of COVID-19.  The government proceeded to issue orders: (i) for segregating isolation wards for suspected and confirmed COVID-19 cases, (ii) specifying treatment protocols for confirmed cases, (iii) establishing medical boards in all COVID-19 hospitals with representation from different medical disciplines, and (iv) establishing fever clinics for suspected patients.  Anganwadi centres and creches were also closed, with provisions to ensure supply of two kilograms of rice and potatoes to each beneficiary.  

On March 21, the government ordered the closure of certain establishments to restrict non-essential social gatherings till March 31, 2020.  This included closure of restaurants, clubs, amusement parks, and museums.  Further, all trains entering the state and inter-state buses were banned till March 31, 2020.

Subsequently, the government announced a lockdown.  In addition to steps for physical containment, the government also undertook various health and welfare measures.  These are detailed below.

Measures taken post-lockdown

On March 22, a lockdown was announced in 23 areas of the state until March 27.  Restrictions during the lockdown included: (i) prohibition on public gatherings of over seven people, (ii) suspension of public transport, and (iii) closure of shops, commercial establishments, offices and factories.  Establishments providing essential goods and services such as health services, print media, banks, groceries, and e-commerce delivery of food and groceries, were excluded from the restrictions.  Over the next few weeks, steps were taken to expand these exemptions, and to regulate the movement of goods and services.

  • List of essential goods and services:  On March 24, the lockdown was extended till March 31 in the entire state, and the exemptions were expanded to include industries producing coal, power, steel, or fertilisers.   After the centre notified a 21-day lockdown, the list of exemptions in the state was gradually expanded to include agricultural operations, fish production, tea garden operations, and operations in krishak bazars for marketing agricultural produce.  At the same time, restrictions were placed on hoarding of masks and hand sanitisers.  

  • Last week, after the central government extended the lockdown till May 3,  orders were passed for resumption of government offices from April 20 onwards at a strength of 25% of workforce.  Similar permission was also granted for restricted operations in jute mills, and IT/IT enabled services.  

  • Regulating movement of goods and services:  A pass system was introduced on March 25 to regulate the movement of persons supplying essential goods and services.  Transportation of non-essential cargo was prohibited till March 31, 2020.  However, as a one-time measure, permission was granted on March 26 to such vehicles to reach their destination.  Two days later, the government ordered for the seamless movement of commodities in all district borders and interstate areas. 

Health Measures

On March 26, a Committee of Experts was constituted to advise on strategies for isolation, quarantine, testing, health infrastructure, and disease prevention.  The Committee has been issuing protocols on clinical management of COVID-19 cases.  The government also established various monitoring committees on setting up isolation hospitals, managing critical care, and to audit the cause of deaths related to COVID-19 patients.  

To respond to the increasing number of patients, the government acquired private healthcare facilities in April.  Further, to expand its testing capacity, the government recommended sample pooling for COVID-19 testing yesterday.

In addition to these measures, the government also issued several guidelines, advisories and orders on containment of the virus, patient handling and protecting healthcare workers.  Some of these are detailed below: 

  • For healthcare facilities:  Advisory for setting up of isolation facilities, orders for establishment of fever clinics to segregate patients with severe symptoms, separation zones for suspected cases to protect healthcare personnel, and use of hydroxychloroquine for asymptomatic healthcare workers.

  • For government:  Guidelines for cluster containment and treatment strategies to contain COVID-19 in hi-risk spots, directions for awareness generation among rural population for containment, and arranging for counselling sessions for quarantined patients.

Welfare/Austerity Measures

  • Creation of relief fund:  The “West Bengal State Emergency Relief Fund” was created on March 23 to mobilise additional resources to cope with the emergency.  On April 2, austerity measures were announced by the government.   These include prohibition on announcement of new schemes, unless required in urgent public interest.

  • Distribution of food:  Free entitlement of wheat and rice was announced on March 26 to beneficiaries under some food subsidy schemes (including the Antyodaya Anna Yojana) until September, 2020.

  • Measures for workers:   Directions were notified in March for provisions on shelter, food, quarantine, wage payment, and continued tenancy for workers.   

  • Free insurance cover was announced on April 1 for treatment of certain categories of persons, including heathcare workers, and police.

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