The government has proposed to accord high priority to provide air connectivity to remote, difficult and interior areas of the country and focusing on building and modernising airports in Tier-II and Tier-III cities
To meet the challenges of burgeoning air traffic, connecting remote areas, creating aviation hubs, ensuring safety and security and liberalising bilaterals to move towards an 'open sky', a new draft civil aviation policy has been framed by the government.
The new Civil Aviation Policy is expected to be in place by January 2015. While releasing the Draft Civil Aviation Policy in Delhi, Civil Aviation Minister Ashok Gajapathi Raju Pusapati, said, “it aims to develop a transparent policy in which regulations for the Civil Aviation sector would be more meaningful.”
The policy, which was drafted and approved by the erstwhile United Progressive Alliance (UPA-II) government, has undergone a fresh review under the Bharatiya Janata Party (BJP)-led regime with additional thrust being given on remote area connectivity.
V Somasundaran, secretary, Civil Aviation, said, “As per the draft, airports are to be designed as integrated multi-modal hubs, so that they provide the best possible service levels as well as potential for growth. An integrated multi-modal hub should include rail, metro, bus and truck connectivity as well as accommodation and other services”.
The draft Civil Aviation Policy, on which the government would seek the views of all stakeholders, would also focus on encouraging regional airlines and suggest steps to move towards lower fares to make aviation affordable.
The draft policy is likely to come up with suggestions regarding jet fuel prices and heavy taxation on it which pose a major roadblock for airlines and consequently, development of aviation hubs in various parts of the country.
The need to coordinate development of tourism and promotion of 'brand India' in a concerted manner may also form part of the policy.
It is not only likely to recommend steps to develop global hubs in India but also establish domestic regional hubs to cater to the growing air traffic from non-metro destinations in remote areas like the northeast.
The government has been according high priority to provide air connectivity to remote, difficult and interior areas of the country and focusing on building and modernising airports in Tier-II and Tier-III cities.
The policy may also come up with a review of the rule, which allows an Indian carrier to fly abroad only after five years of domestic operations and after it has a 20-aircraft fleet.
However, the proposals, many of which were made public over several months for an open debate, have come under criticism from various quarters, including the airlines, which have been saying that high costs of fuel, aircraft and spares, mainly due to taxation, have disrupted the spread of air connectivity to remote areas.
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On 5th November, Union minister Ravi Shankar Prasad was on television announcing a massive Rs2,375-crore infusion of funds into 23 district central cooperative banks across the country. These include 16 banks in Uttar Pradesh, three each in Jammu & Kashmir and Maharashtra and one in West Bengal.
The minister said that the move was aimed at protecting small depositors. A Cabinet meeting that approved this capital infusion at taxpayers’ expense had imposed some meaningless conditions like growing deposits at the rate of 15% and halving bad loans over the next two years. On 30th June, The Mint had reported that 45 cooperative banks were likely to face penal action by the Reserve Bank of India (RBI).
Of these, 23 did not even have licences and would need Rs2,100 crore even to meet the 4% capital adequacy ratio. These 23 seem to be the ones that have received taxpayers’ money.
The action sets a terrible precedent by ignoring the fact that cooperative banks are in a mess because of dual regulation, political involvement and interference in their management and the fact that large chunks of their irrecoverable loans are usually to politically connected persons who are wilful defaulters.
Consequently, cooperative banks are poorly regulated and fail, with alarming regularity. Unfortunately, most people are unaware of the poor supervision of these banks which usually target small depositors with higher interest rates. Interestingly, while banking decisions are hugely susceptible to political pressure, the government has ensured that deposits of up to Rs1 lakh of all banks, including cooperative banks, are protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
It is important to remember that a previous BJP-led National Democratic Alliance (NDA) government (1999-2004) had not hesitated to get a pliant RBI governor and DICGC to bend the rules for Madhavpura Mercantile Cooperative Bank (MMCB) after the Ketan Parekh scam of 2000-01. MMCB’s management had destroyed the Bank by lending nearly Rs1,000 crore to scamster Ketan Parekh. Under DICGC rules, deposit insurance is paid out only after a bank goes into liquidation. An exception was made for MMCB, to appease a powerful BJP minister and several hundred crore rupees were paid out. Those days, a decimated Congress, as the leading opposition party, did not protest. It will be a sad day for financial consumers if history repeats itself and a powerful BJP government decides to protect shady cooperative banks instead of bringing them under the clear and unambiguous regulation and supervision of RBI.