There have been articles in the media on the future passage of the Women's Reservation Bill stating that the Bill will have to be ratified by state legislatures before it is signed into law by the President. Our analysis indicates that ratification by state legislatures is not required. We state the reasons below: This Bill amends the Constitution. It (a) amends Article 239AA, Article 331, and Article 333, and (b) inserts Article 330A, Article 332A, and Article 334A. In doing so the Bill:
Article 368 regulates the procedure for amending the Constitution. It states that the ratification of the state legislatures to a constitutional amendment is required in the following cases: a. If there is a change in the provisions regarding elections to the post of the President of India. b. If there is a change in the extent of the executive power of the centre or the state governments. c. If there is any change in the provisions regarding the Union judiciary or the High Courts. d. If the distribution of legislative powers between the centre and the states is affected. e. If any of the Lists in the Seventh Schedule is affected. f. If the representation of the states in the Rajya Sabha is changed. g. Lastly, if Article 368 itself is amended. None of these provisions are attracted in the case of the Women's Reservation Bill. The Parliament recently extended the reservation of seats for SCs, STs and Anglo-Indians in Lok Sabha and Legislative Assemblies by another ten years. Article 334 was amended to state that such reservation "will cease to have effect on the expiration of a period of seventy years from the commencement of the Constitution." The 109th Amendment Bill was passed by both Houses of Parliament and did not require the ratification of the states before being signed into law by the President. It follows that if Bills amending provisions for reserving seats for SCs and STs don't need ratification by state legislatures, a bill reserving seats for women does not need ratification either. Thus Article 368 very clearly lays down situations in which state legislatures have to ratify a piece of legislation before it can receive the assent of the President.
Earlier this week, Rajya Sabha passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019, and the Bill is now pending in Lok Sabha. The Bill amends the Airports Economic Regulatory Authority of India Act, 2008. The Act established the Airports Economic Regulatory Authority of India (AERA). AERA regulates tariffs and other charges for aeronautical services provided at civilian airports with annual traffic above 15 lakh passengers. It also monitors the performance standard of services across these airports. In this post, we explain the amendments that the Bill seeks to bring in and some of the issues around the functioning of the regulator.
Why was AERA created, and what is its role?
Few years back, private players started operating civilian airports. Typically, airports run the risk of becoming a monopoly because cities usually have one civilian airport which controls all aeronautical services in that 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. Consequently, the Airports Economic Regulatory Authority of India Act, 2008 (AERA Act) was passed which set up AERA.
AERA regulates tariffs and other charges (development fee and passenger service fee) for aeronautical services (air traffic management, landing and parking of aircraft, ground handling services) at major airports. Major airports include civilian airports with annual traffic above 15 lakh passengers. In 2018-19, there were 32 such airports (see Table 1). As of June 2019, 27 of these are being regulated by AERA (AERA also regulates tariffs at the Kannur airport which was used by 89,127 passengers in 2018-19). For the remaining airports, tariffs are determined by the Airports Authority of India (AAI), which is a body under the Ministry of Civil Aviation that also operates airports.
What changes are being proposed in the Bill?
The Bill seeks to do two things:
Definition of major airports: Currently, the AERA Act defines a major airport as one with annual passenger traffic over 15 lakh, or any other airports as notified by the central government. The Bill increases the threshold of annual passenger traffic for major airports to over 35 lakh.
Tariff determination by AERA: Under the Act, AERA is responsible for determining the: (i) tariff for aeronautical services every five years, (ii) development fees, and (iii) passengers service fee. It can also amend the tariffs in the interim period. The Bill adds that AERA will not determine: (i) tariff, (ii) tariff structures, or (iii) development fees, in certain cases. These cases include those where such tariff amounts were a part of the bid document on the basis of which the airport operations were awarded. AERA will be consulted (by the concessioning authority, the Ministry of Civil Aviation) before incorporating such tariffs in the bid document, and such tariffs must be notified.
Why is the Act getting amended?
The Statement of Objects and Reasons of the Bill states that the exponential growth of the 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. If the challenge for AERA is availability of limited resources, the question is whether this problem may be resolved by reducing its jurisdiction (as the Bill is doing), or by improving its capacity.
Will the proposed amendments strengthen the role of the regulator?
When AERA was created in 2008, there were 11 airports with annual passenger traffic over 15 lakh. With increase in passenger traffic across airports, currently 32 airports are above this threshold. The Bill increases the threshold of annual passenger traffic for major airports to over 35 lakh. With this increase in threshold, 16 airports will be regulated by AERA. It may be argued that instead of strengthening the role of the regulator, its purview is being reduced.
Before AERA was set up, the Airports Authority of India (AAI) fixed the aeronautical charges for the airports under its control and 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 conflict of interest. Further, there was a natural monopoly in airports and air traffic control. In order to regulate the growing competition in the airline industry, and to provide a level playing field among different categories of airports, AERA was set up. During the deliberations of the Standing Committee examining the AERA Bill, 2007, the Ministry of Civil Aviation had noted that AERA should regulate tariff and monitor performance standards only at major airports. Depending upon future developments in the sector, other functions could be subsequently assigned to the regulator.
How would the Bill affect the regulatory regime?
Currently, there are 32 major airports (annual traffic above 15 lakh), and AERA regulates tariffs at 27 of these. As per the Bill, AERA will regulate 16 major airports (annual traffic above 35 lakh). The remaining 16 airports will be regulated by AAI. Till 2030-31, air traffic in the country is expected to grow at an average annual rate of 10-11%. This implies that in a few years, the traffic at the other 16 airports will increase to over 35 lakh and they will again fall under the purview of AERA. This may lead to constant changes in the regulatory regime at these airports. The table below provides the current list of major airports:
Table 1: List of major airports in India (as on March 2019)
| Airports with annual traffic above 35 lakh | Airports with annual traffic between 15 and 35 lakh | ||||
|
Ahmedabad |
Goa |
Mumbai |
Amritsar |
Madurai* |
Srinagar |
|
Bengaluru |
Guwahati |
Patna |
Bagdogra |
Mangalore |
Trichy* |
|
Bhubaneswar |
Hyderabad |
Pune |
Calicut |
Nagpur |
Varanasi |
|
Chennai |
Jaipur |
Thiruvananthapuram |
Chandigarh |
Port Blair* |
Vishakhapatnam |
|
Cochin |
Kolkata |
Coimbatore |
Raipur* |
||
|
Delhi |
Lucknow |
Indore |
Ranchi* |
||
* - AERA does not regulate tariffs at these airports currently.
Sources: AAI Traffic News; AERA website; PRS.
