Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

Ministry of Civil Aviation releases Vision 2040 document

Note4students

Mains Paper 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

From the UPSC perspective, the following things are important:

Prelims level: Aviation related stats

Mains level: The potential of the aviation sector and dealing with various issues associated with it


News

  • The Ministry of Civil Aviation has unveiled the Vision 2040 document, which highlights the growth potential in different sub-sectors of Indian aviation and the key action steps are required to be taken to achieve the desired objective.

Highlights of Vision 2040

  1. As per the document the total passenger traffic (to, from and within India) in India is expected to rise nearly six-fold from 187 million in FY 2018 to around 1124 million in FY 2040.
  2. This includes around 821 million domestic passengers and around 303 million international passengers (to and from India).
  3. The overall CAGR (compound annual growth rate) works out to around 9% in domestic and 7% in international traffic during FY 2018-2040.

Why such long-term plan?

  1. Rather than having five-year plans, the document talks about India having a robust 20-year plan that lays out the targets and the path to get there along with time lines and clear accountability.
  2. Since aviation is a longterm plan, aircraft procurement, airport development, air navigation system changes and skill development should be done in a cohesive manner.
  3. It said technology developments like artificial intelligence, machine learning, blockchain, composites, super-alloys, biofuels etc. are changing the face of aviation.
  4. It is humanly impossible to predict the oil price or the exchange rate a month down the line, much less the impact of technology 10 years hence.

A high growth path

  1. Total passenger traffic to, from and within India, during Apr-Nov 2018 grew by around 15% year on year as compared to around 6% globally.
  2. India is now the seventh largest aviation market with 187 million passengers (to, from and within India)inFY2017-18.
  3. It is expected to be third largest by 2022.

Various Initiatives

  1. As per the document initiatives like Nabh Nirman (for airport capacity augmentation), Digi Yatra (for paperless travel) and AirSewa (for online passenger grievance redressal) are bringing in radical changes.

Policy Suggestions

  1. It said that the government may consider establishing a Nabh Nirman Fund (NNF) with a starting corpus of around $2 billion to support low traffic airports in their initial phases.
  2. The tax structure for Aviation Turbine Fuel (ATF), Maintenance, Repair and Overhaul (MRO) and aircraft leasing may be gradually aligned with leading global jurisdictions.
  3. The concept of land pooling may be used to keep land acquisition costs low and to provide landowners with high value developed plots in the vicinity of the airport.
  4. It also said DGCA may be converted into a fully-independent Civil Aviation Authority, with its own sources of funding and freedom to recruit professionals at market-linked salaries.
  5. Most transactions with DGCA will be automated with minimal human interface.
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