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On September 14, 2012, the central government announced that foreign airlines would now be allowed to invest up to 49% in domestic airlines. Under the policy announced by the government, the ceiling of 49% foreign investment includes foreign direct investment and foreign institutional investment. Prior to investing in a domestic airline, foreign airlines would have to take approval of the Foreign Investment Promotion Board. Additionally, the applicant will also be required to seek security clearance from the Home Ministry. In 2000, the government first permitted foreign direct investment up to 40% in the domestic airline sector. However, no foreign airline was allowed to invest either directly or indirectly in the domestic airlines industry. Non Resident Indians were permitted to invest up to 100%. Furthermore, the foreign investor was required to take prior approval of the government before making the investment. Subsequently, the central government eased the foreign investment norms in this sector. As of April 2012, foreign direct investment is permitted in all civil aviation sectors. The Civil Aviation sector in India includes airports, scheduled and non-scheduled domestic passenger airlines, helicopter services / seaplane services, ground handling Services, maintenance and repair organizations, flying training institutes, and technical training institutions. Foreign airlines were not permitted to invest either directly or indirectly in domestic passenger airlines. However, they are permitted to invest in cargo companies and helicopter companies. Investment by foreign airlines in the domestic airline industry has been a long standing demand of domestic airlines. According to the Report of the Working Group on Civil Aviation for formulation of twelfth five year plan (2012-17), India is currently the 9th largest civil aviation market in the world. Between 2008 and 2011, passenger traffic (domestic and international) and freight traffic increased by a compounded annual growth rate of 7% and 11% respectively. The traffic growth (passenger and freight) at 18% exceeded the growth rate seen in China (9.7%) and Brazil (7.5%), and was higher than the global growth rate of 3.8%. According to the Centre for Civil Aviation, until February 2012, India had the second highest domestic air traffic growth. However, due to the crisis faced by Air India and Kingfisher, the passenger numbers have declined in June-July 2012. India was the only major domestic market that failed to show an expansion in demand in June 2012, as compared to the previous year. Despite the rapid growth, the financial performance of airlines in India has been poor. According to the Report of the Working Group on Civil Aviation, the industry is expected to have a debt burden of approximately USD 20 billion in 2011-2012. According to the same report, during the period 2007-2010 India's airlines suffered an accumulated loss of Rs 26,000 crores. According to the government, investment by foreign airlines shall bring in the much needed funds and expertise required by the domestic industry. However, as per to some analysts, foreign investment alone cannot solve the problem. According to them, the major cost impacting the growth of the industry is the high cost of Aviation Turbine Fuel. As per the press release by the government on June 6, 2012, ATF accounts for 40% of the operating cost of Indian carriers. In comparison, fuel constitutes only 20% of the cost for international carriers. ATF in India is priced, on an average, 60% higher than international prices. This is due to the high rate of taxation imposed on ATF by some states. In most states, the VAT on ATF is around 25-30%.
As of April 22, 2020, Sikkim does not have any confirmed cases of COVID-19. As of April 21, 2020, 87 samples have been sent for testing from Sikkim. Of these, 80 have tested negative for COVID-19, and the results of seven samples are awaited. The state has announced several policy decisions to prevent the spread of the virus and provide relief for those affected by it. In this blog post, we summarise some of the key measures taken by the Sikkim state government in this regard as of April 22, 2020.
Response before national lockdown
On March 16, the state government responded to the growing number of suspected cases in India by notifying certain directions to be applicable till April 15, 2020. These included: (i) banning the entry of all domestic and foreign tourists in to the state, (ii) closing all educational institutes and anganwadis, (iii) prohibiting the use of recreational facilities such as, casinos, gym, and cinemas, (iii) closing three out of five check posts (border opening) for all visitors in to the state and opening the other two only for medical and police teams, and (iv) banning private industries from getting migrant workers from outside the state and avoiding large concentration of workers at one place.
On March 19, assembly of more than five people was prohibited in the state until April 15, 2020. The government ordered the suspension of all non-essential work on March 19. The supply of all essential commodities such as food grains, vegetables, sanitisers and masks was allowed. Further, the formation of a sub-divisional task force to detect suspected cases was ordered.
On March 22, the government regulated intra-state movement of private vehicles, two-wheelers and taxis on an odd-even basis (allowing plying of vehicles on alternate days as per the number plate) until April 15, 2020. The government also reduced the budget session of the state to two days on March 23.
On March 25, the central government announced on a 21-day country-wide lockdown till April 14. During the lockdown the state government took various steps for physical containment, health, financial and welfare measures. These are detailed below.
Measures taken during lockdown
Movement Restrictions
Certain movement restrictions were put across the state. These include:
Essential Goods and Services
On April 5, the state government issued an order requiring establishments such as shops, hotels, private offices, and commercial establishments to remain closed until April 15. Establishments which were permitted to remain functional include law enforcement agencies, health services, electricity and water services, petrol pumps, and media. Shops for PDS, groceries, vegetables, milk and, medicines were only allowed remain open from 9 am to 4 pm.
Health Measures
On March 31, the Sikkim government identified and set up dedicated isolation wards and treatment centres in the STNM hospital, Sochakgang as a precautionary measure. The government also issued directions for citizens to avoid getting infected by coronavirus. These included social distancing, and maintaining proper hygiene.
On April 18, the state government made it mandatory for all the public, students, teachers, and government employees, to install the Aarogya Setu application. The government of India launched a mobile app called ‘Aarogya Setu’ to enable people to assess the risk of catching COVID-19 on April 2, 2020. The app uses Bluetooth and Global Positioning System (GPS) based device location for contact tracing in order to prevent the spread of COVID-19.
Welfare Measures
Certain relaxations after 20th April
On April 14, the nation-wide lockdown was further extended till May 3, 2020. On April 15, the Ministry of Home Affairs issued guidelines outlining select activities which will be permitted from April 20 onwards. These activities include health services, agriculture related activities, certain financial sector activities, operation of Anganwadis, MNREGA works, and cargo movement. Further, subject to certain conditions, commercial and private establishments, industrial establishments, government offices, and construction activities will also be permitted. The Sikkim government took the following steps in the same line.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
