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CURRENT AFFAIRS 28-07-2018

Airports Economic Regulatory Authority (AERA) of India Act

 

Relevancy

  • GS Mains Paper-2, Government Policies, and Intervention

Why in news?

  • India has emerged as the third largest domestic aviation market in the world.
  • Increasing passenger load demands for better regulatory structures and hence rejiging the AERA is needed.

What is AERA?

  • “Airports Economic Regulatory Authority (AERA) of India Act” was passed in 2008, to establish an independent aeronautical regulatory authority.
  • The authority was to work for the protection of the interest of airports, airlines and passengers and also regulate traffic for aeronautical services.
  • Aeronautical services primarily include navigation, surveillance and supportive communication for air traffic management and landing facilitation.
  • Further, housing or parking of an aircraft; ground safety, fuel and handling services, are also covered under aeronautical services.

Why the amendment to the Act was needed?

  • Exponential growth in the sector and increase in the number of airports has subjected AERA to tremendous pressure.
  • The number of major airports increased from 12 to 27 between 2007 and 2017 and numerous minor airports have also seen a spike in traffic.
  • Notably, a number of private operators have also entered the airline/airport sector, and some major airports are run under public-private partnership.
  • It was felt that the expanding magnitude of AERA’s workload was affecting its efficiency in determining tariffs and monitoring services at major airports.
  • For engaging private players in projects, several business models like predetermined tariff or tariff-based bidding have come up.
  • With such structures in place, the government has found that the market itself determines the charges and hence alleviating the need for a market regulator.
  • Hence, as the 2008 AERA act doesn’t cover such complexities, the government has now proposed a bill to amend it.

What does the AERA (Amendment) Bill, 2018 seek to do?

  • It proposes to amend the definition of “major airport” as any airport with passengers in excess of 3.5 million from the existing 1.5 million.
  • Further, it seeks to update Section 13 of the 2008 Act in tune with the current business models and tariff system.
  • Notably, section 13 is an umbrella provision which covers capital expenditure incurred and timely investment in improvement of airport facilities.
  • Hence, these changes could implicitly mean changes in the tariff for aeronautical services at major airports.

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Dealing with India’s Surplus Scenario

 

Relevancy

  • GS Mains Paper-3, Economy

What is the issue?

  • Markets must develop capacity to absorb higher milk and food grain output.

What are the recent developments?

  • Falling producer prices of food crops and milk have emerged as a major issue over the last year.
  • The Centre has awarded increases in support prices (e.g. MSP) in the case of cereals and pulses.
  • The Maharashtra government has accepted the protesting dairy growers’ demand to buy milk at Rs.25 a litre.

What are the challenges?

  • Higher support prices sometimes lead to negative outcomes.
  • This is especially true if they are not backed up by procurement and additional demand.
  • Evidently, the total pulses procurement was over 4 million tonnes in 2017-18.
  • But this procurement amounted only to less than a fifth of pulses output.
  • So it could not arrest a fall in prices to well below the support price level.
  • Contrastingly, wheat and paddy prices for farmers are encouraging.
  • This is because, in this case, procurement accounts for a third of the output.
  • Falling producer prices is often mistaken to be a case of excess production.
  • However, this could not be relevant in all cases as malnutrition is still rampant in India.
  • Evidently, the net per capita daily availability of foodgrains (including cereals and pulses) has only now crossed the 500-gm mark.
  • For milk, the per capita daily availability of over 350 gm is just a little more than the dietary recommendation.
  • Clearly, there are inequalities in food intake across income groups.
  • This is particularly true in the case of vegetables, fruit, milk and eggs.
  • So it is clear that the population can absorb a higher output of food, eggs and milk.
  • The real issue is thus of sorting out market limitations through a range of steps.

What needs to be done?

The procurement and public distribution system need to be strengthened and streamlined.

An efficient PDS –

  1. opens up additional demand
  2. addresses nutritional deficiencies
  3. helps stabilise the market by utilising a part of the produce
  • Public kitchens, which have begun in the southern States, should be promoted elsewhere.
  • States can introduce milk and its products in mid-day meals and in railway stations at cheap rates.
  • In all, Indian agriculture needs a distribution system that can cope with much higher levels of output.

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