Challenges emanating from the AERA (Amendment) Bill, 2021

Aditya Kumar - August 6, 2021

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.

Legislation

The Personal Data Protection Bill, 2019: How it differs from the draft Bill

Anurag Vaishnav - December 27, 2019

The Personal Data Protection Bill, 2019 was recently introduced in Parliament. The Bill has been referred to a Joint Parliamentary Committee for detailed examination, and the Committee is expected to submit its report by the last week of Budget Session, 2020. The Bill seeks to provide for the protection of personal data of individuals (known as data principals), and creates a framework for processing such personal data by other entities (known as data fiduciaries). It provides the data principal with certain rights with respect to their data, such as seeking correction, completion or transfer of their data to other fiduciaries. Similarly, it sets out certain obligations, and other transparency and accountability measures to be undertaken by the data fiduciary, such as instituting grievance redressal mechanisms to address complaints of individuals. Processing of personal data is exempted from the provisions of the Bill in certain cases, such as security of state, public order, or for prevention, investigation, or prosecution of any offence. The Bill also establishes a Data Protection Authority to ensure compliance with the provisions of the Bill and provide for further regulations.

As per the Statement of Objects and Reasons of the 2019 Bill, the provisions of the Bill are based on the recommendations of the report of the Expert Committee (Chair: Justice B. N. Srikrishna) which examined issues related to protection of personal data and proposed a Draft Personal Data Protection Bill, 2018.

In a previous blog, we provided a brief background to the 2019 Bill, explained why a Bill was brought for personal data protection and what are some of the key provisions of the Bill. In this blog, we look at how the 2019 Bill differs from the 2018 Draft Bill.

Table 1: Comparison of the provisions of the 2018 Draft Bill with the 2019 Bill

Provision	Draft Personal Data Protection Bill, 2018	Personal Data Protection Bill, 2019
Definition of personal data	Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual.	The Bill retains the definition and adds that such characteristics or traits will also include any inference drawn from such data for the purpose of profiling.
Sensitive personal data	Sensitive personal data includes personal data related to health, sex life, sexual orientation, financial data, passwords, among others. The Data Protection Authority can categorise any other personal data as sensitive personal data.	The Bill removes passwords from the category of sensitive personal data. The power to further categorise personal data as sensitive personal data will lie with the central government (in consultation with Data Protection Authority and the sector regulator concerned).
Rights of individual (data principal)	The data principal has certain rights with respect to their data such as obtaining confirmation on whether their data has been processed, seeking correction, transfer, or restriction on continuing disclosure of their data.	The Bill provides the right to erasure of personal data which is no longer necessary for the purpose for which it was processed, as an additional right for the data principal.
Non-consensual processing of personal data	Personal data may be processed without obtaining the consent of the individual on certain grounds. These include: (i) any function of Parliament or state legislature, (ii) if required by the State for providing benefits to the individual, and (iii) for reasonable purposes specified by the Authority, such as fraud detection, debt recovery, and whistle blowing.	The Bill removes the provision on any function of Parliament or state legislature as a ground for non-consensual processing of personal data. The Bill adds ‘operation of search engines’ as a reasonable purpose for which non-consensual processing of personal data may be allowed by the Authority.
Social media intermediaries	The draft Bill did not contain this term.	The Bill defines a social media intermediary as an intermediary which enables online interaction between users and allows for sharing of information. All social media intermediaries which are classified as significant data fiduciaries (fiduciaries with users above a notified threshold whose actions can impact electoral democracy or public order) must provide a voluntary user verification mechanism for all users in India.
Exemptions for the government for processing of personal data	The State is exempted from the provisions of the Bill while processing personal data in the interest of national security. However, such processing must be permitted by a law and must be proportionate to the interests being achieved. Further, such processing must be done in a fair and reasonable manner.	The government can exempt any of its agencies from any or all provisions of the Act, for processing of personal data in certain cases. These include: (i) in interest of security of state, public order, sovereignty and integrity of India and friendly relations with foreign states, and (ii) for preventing incitement to commission of any cognisable offence relating to the above matters.
Exemptions for manual processing by small entities	Transparency and accountability measures and certain other obligations will not apply to small entities. These are fiduciaries which: (i) have annual turnover below Rs 20 lakh (or such lower amount as prescribed), and (ii) did not process data of more than 100 individuals in any one day in the last year.	The Bill retains the exemption for small entities. However, it does away with the prescribed limits and allows the Authority to classify fiduciaries as small entities based on the annual turnover of fiduciary and the volume of data processed by such fiduciary.
Transfer of personal data outside country	One serving copy of all personal data should be stored in India.	The Bill removes the provision for mandatory storage of all personal data in the country. It provides that sensitive personal data must continue to be stored in India. Such data can be transferred outside India if explicitly consented by the individual, and subject to certain additional conditions.
Composition of Data Protection Authority of India	The chairperson and members of the Authority will be appointed by the central government on the recommendations of a selection committee. The selection committee will be comprised of: (i) Chief Justice of India or a Judge of Supreme Court as the chairperson, (ii) Cabinet Secretary, and (iii) an expert in field of data protection, information technology and related subjects.	The Bill provides that the selection committee will be comprised of: (i) Cabinet Secretary as the chairperson, (ii) Secretary, Department of Legal Affairs, and (iii) Secretary, Ministry of Electronics and Information Technology.
Offences and penalties	Under the Bill, offences such as: (i) obtaining, disclosing, transferring, or selling personal data in contravention of the Act, and (ii) re-identification and processing of de-identified personal data (data from which identifiers have been removed) without consent, are punishable with imprisonment.	Under the Bill, re-identification and processing of de-identified personal without consent is the only offence punishable with imprisonment.
Non-personal and anonymised personal data	No provision of the Bill would apply to non-personal data used by government for formulation of policies for digital economy, growth or security.	The Bill retains the provision and further provides that the government can direct data fiduciaries to provide it any: (i) non-personal data and (ii) anonymised personal data (where it is not possible to identify data principal) for better targeting of services and formulation of evidence-based policy.

Sources: The Draft Personal Data Protection Bill, 2018; The Personal Data Protection Bill, 2019; PRS.

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Challenges emanating from the AERA (Amendment) Bill, 2021

The Personal Data Protection Bill, 2019: How it differs from the draft Bill

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