Challenges emanating from the AERA (Amendment) Bill, 2021
Distilled Policy Brief
- The Bill’s provision to club profit‑making and loss‑making airports for PPP may lead to cross‑subsidisation, raising tariff costs for profit‑making airports, and the expanded scope could strain AERA’s limited resources, as reflected by the 2019 amendment that reduced its airport count.
🎯 Prelims High-Yield Examination Points
The AERA (Amendment) Bill, 2021 empowers the central government to group airports and designate the group as a major airport, shifting tariff regulation to AERA.
⚖️ Mains Analytical & Syllabus Linkages
Discuss the implications of airport grouping under the AERA (Amendment) Bill, 2021 on tariff structures, cross‑subsidisation and the regulator’s capacity to oversee an expanded portfolio.
🎯 UPSC Prelims Practice Drill
According to the challenges highlighted for the Airports Economic Regulatory Authority (Amendment) Bill, 2021, which implication arises from the provision that allows the central government to club profit‑making and loss‑making airports as a single entity for PPP?
- [A] It enables AERA to set uniform tariffs for all airports, eliminating the need for AAI’s involvement.
- [B] It may lead to cross‑subsidisation, causing higher tariff costs for profit‑making airports.
- [C] It reduces the regulatory burden on AERA by decreasing the number of airports under its jurisdiction.
- [D] It mandates that all tariff structures be pre‑determined in the bidding documents, removing AERA’s discretion.
▶ Reveal Official Answer & Analytical Explanation
The Bill’s grouping provision can result in cross‑subsidisation, whereby loss‑making airports are subsidised by profit‑making ones, raising tariffs for the latter. Options A, C and D misstate the Bill’s effects: AERA does not take over all tariffs, grouping can strain rather than ease AERA’s workload, and tariff determination is only exempted when already fixed in bidding documents, not mandated for all.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.