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The Naresh Chandra Committee submitted the second and final part of its report on the Civil Aviation Sector to Shri Praful Patel, Minister for Civil Aviation today. Accepting the report the Minister said that the new Civil Aviation Policy based on this report will be formulated by the end of this year.
The Union Government, in July 2003, had constituted a Committee headed by Shri Naresh Chandra, former Cabinet Secretary to prepare a road map for the Civil Aviation Sector that would provide the basis for a new National Civil Aviation Policy. The Committee was given a brief to prepare a road map for developing a world class Civil Aviation Sector capable of meeting the requirements of a rapidly growing and modernizing continental size economy. The terms of reference of the Committee were:
Competition in the area of international and domestic airlines and the future role of Air India Ltd. and Indian Airlines Ltd.;
Restructuring of airports with a view to developing a world-class airport infrastructure including one or more international hubs;
Affordability and connectivity in the domestic aviation sector;
Development of regional air connectivity within the country;
Mechanism for providing air service to interior areas and operation of economically unviable but socially essential routes;
Regulatory mechanism for technical and financial issues;
Promotion of general aviation;
Aviation security;
Aviation safety;
Aviation training.
The first part of the committee’s report was released in November, 2003. It covered
Air Transport Services
International trends
Emerging Indian scenario
Way forward
2. Airports
Private participation : International Developments
Private participation in Indian Airports
Regulatory Issues
Air Traffic Control
International trends
Way ahead in India
Meteorological Services for Aviation
4. Institutional Framework
Safety regulation
Economic regulation
Essential but Uneconomical services
Management of bilaterals
Aviation security
Immediate concerns and remedies
Fiscal regime
Other taxes and fees
Airport charges
Sourcing of ATF
Level playing field issues
Interface with other Ministries
Strategy and summary of recommendations
Enhancing affordability, connectivity and general aviation
Immediate concerns and remedies
Air Transport services
Airports
Air traffic control
Institutional framework
The Government has already taken some steps in line with these recommendations.
The Excise Duty on Aviation Turbine Fuel (ATF) has been reduced.
Inland Air Travel Tax and Foreign Travel Tax have been abolished.
Landing and Route Navigation Facility Charges (RNFC) have been lowered.
Charter Policy has been liberalized.
The process of restructuring Delhi and Mumbai International Airports has been initiated.
The Committee notes with concern that the Government has now decided to withdraw the exemption from tax on remittance of lease rental of aircraft with effect from April, 2005. The Committee feels that this measure would act as a disincentive for plans to set up regional airlines to connect small towns. Air connectivity to small towns, especially those of tourist importance, should be a major thrust area in the coming years. Typically, these regional airlines would be small operations using small aircraft taken on lease. The Committee, therefore, recommends that the exemption from tax should not be discontinued.
The Committee would like to reiterate that all new initiatives in the Civil Aviation sector should be formulated giving the highest priority to the needs of the travelling public and other users. This would mean lowering the costs, encouraging competition, eliminating the hassles at airports consistently with the need of ensuring safety and security. It is well recognized now that in a modern economy air travel is not an elitist luxury but an essential requirement for conduct of efficient business and commerce. The multiplier effects of an efficient civil aviation sector can be tremendous.
The Naresh Chandra Report (Part-II) is organized in 5 Chapters. The Committee has focused its attention on issues of detail pertaining to training, aviation security, safety regulation, legal framework and airport infrastructure. It is felt that expeditious action in addressing these issues decisively will have beneficial consequences for the expansion of the civil aviation sector.
Chapter 2 of the report relating to ‘Training’ addresses issues pertaining to the training of engineers and pilots and the role of the Indira Gandhi Rashtriya Udan Academy (IGRUA).
Chapter 3 relating to ‘Aviation Security’ emphasises the need for a new Civil Aviation Security Act and delineates measures needed for improving coordination among various agencies involved in the provision of aviation security and for streamlining the procedures for immigration and customs clearance.
Chapter 4 relating ‘Security Regulation’ espouses the need for enhancing safety regulation by strengthening and appropriately restructuring the Directorate General of Civil Aviation (DGCA) in order to enable it to take up effective monitoring of the CNS/ATM and Flight Calibration and carrying out certain amendments to the Aircraft Act 1934 (for licensing Air Traffic Controllers), Aircraft Rules 1937 and other Regulations.
Chapter 5 relating to ‘Infrastructure’ highlights the need and scope for enhancing Airspace capacity, operational capabilities of Delhi and Mumbai airports and Communication, Navigation & Surveillance capacities. In addition, it suggests measures for the development of Heliports & Helipads, Cargo Operations and indigenous aeronautical products.
The Committee has also noted the recent upswing in the fortunes of the civil aviation sector all over the world, after the sudden-down turn in air traffic after 11th September, 2001. Many Governments and Airlines have, therefore, finalized plans for substantial investments into upgrading their civil aviation infrastructure, augmenting the airline’s fleet and going in for an aggressive campaign to gain a larger share of the market. The Committee anticipates that the Indian civil aviation system including our airlines, would face increasing competition from places near our shores, for example Dubai, Singapore, Kuala Lampur, Colombo to name a few. Reports also indicate of substantial expansion of the airlines’ fleet in China and Japan as well. In the Committee’s view, a bold and pragmatic approach by all the concerned interests in India is essential to withstand this competition. The Committee sees no reason why the Indian civil aviation system cannot be among the best in Asia. While infrastructure indeed is a limiting factor, lack of capacity to and from India is yet another major constraint. In order to ameliorate this condition, the Committee would like to urge the government to expedite liberalisation of air transport services, beginning with allowing domestic airlines to utilise the unused entitlements in the present air services agreements, especially with regard to all destinations with high traffic.
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