The government has proposed levying of a “safety fee” — on each passenger catching a flight — of either `5 or `10 which will create additional revenue of `50 crores or `100 crores (depending on the levy) to fund the new proposed Civil Aviation Authority (CAA) to be set up as an aviation regulator that will replace the current aviation regulator DGCA.
The Union Cabinet on Thursday approved the proposed establishment of the CAA and the CAA bill will eventually be placed before Parliament. Top government sources said “the effectiveness of the DGCA has been affected by shortage of trained and experienced manpower” and that “being a government department, there are severe limitations in its working with regard to procedures for recruitment of manpower, lapsing of posts ... pay packages, inadequate training facilities of its own ... .”
So far as the financial implications are concerned, in addition to the proposed safety fee, other sources of revenue generation will also be tapped. For instance, one per cent of air-navigation services collected by the state-run Airports Authority of India (AAI) will yield another `18 crores and the government also proposes to revise various fees/charges leading to revenue generation of another `50 crores. So, the total generation of revenue will be `118 crores (if safety fee is `5 per passenger) or `168 crores (if safety fee is `10 per passenger). The government has proposed to constitute a “CAA of India fund” wherein all fees and charges as well as grants made by the Union Government will be credited.
The government has also said that the International Civil Aviation Organisation (ICAO) has a well-defined policy on setting up of an autonomous CAA by contracting states and has even pointed out that some of the countries that have set up the CAA include Pakistan and Sri Lanka.
“There is adequate justification to set up the CAA under the overall oversight of the ministry of civil aviation, having administrative and financial flexibility to regulate the Civil Aviation sector,” the civil aviation ministry has suggested.