While the Modi government is determined to make regional connectivity its aviation centrepiece, it is yet to satisfactorily answer questions over infrastructure development and its plan for Air India.
New Delhi: India’s civil aviation ministry laid out its report card for the last three years this week, highlighting primarily Prime Minister Narendra Modi’s subsidised UDAN regional connectivity scheme, a plan that experts say while commendable must be expanded cautiously and carefully.
Addressing journalists on Tuesday, civil aviation minister Ashok Gajapathi Raju and junior minister Jayant Sinha described the last three years as “eventful” and kicked off discussions with reference to the new national civil aviation policy and the UDAN (Udde desh ka Aam Nagrik) scheme.
The promise of the regional connectivity scheme has been simple: A certain number of seats on hour-long flights are capped at Rs 2,500 and the central government ponies up the rest of the cash through a mechanism called viability gap funding.
The first flight under UDAN took place last month, when 24 seats were on a Delhi-Shimla flight were priced at subsidised tag of Rs. 2,036.
Raju said that the UDAN scheme, which was part of the BJP manifesto, has added “13 lakh new airline seats” for a viability gap funding of Rs 205 crore. Industry experts The Wire spoke to pointed out that the success of heavily subsidised regional connectivity depended on whether simultaneous infrastructure development took place in underserved airports and cities, especially in terms of how connected the cities are to the respective cities.
The civil aviation minister perhaps was referring to this issue when he announced that Rs 4,500 crore would be ivnested for the revival of “50 airports” through infrastructure development.
“The government through the UDAN scheme wants to ensure that the common man can afford a flight ticket,” Raju said, without revealing further elements that the government is looking forward to add to make sure that the scheme works.
The Wire has reported on how Modi’s regional connectivity gambit is aimed, in part, at breathing life back into India’s “ghost airports”. Both Raju and Sinha however did not bring up the question of failing airport infrastructure: At last count, up to $50 million has been spent on eight airports that have not recieved any scheduled flights since 2009. The most egregious of these is the Jaisalmer airport which took $17 million to build but has not operated any scheduled flight.
The civil aviation ministry’s report card however is silent on whether the UDAN scheme will be expanded to include those airports. In fact, on the contrary, Raju pointed out that the government was looking forward “to build new airports through the UDAN scheme”.
In 2016, the Modi government announced that the Airport Authority of India would be receiving a sum of Rs 15,000 crore for infrastructure. However, experts point out that a specific roadmap for the same has yet to be laid out.
In fact, although the Modi government wants the aam aadmi to enjoy flight services, it’s clear the UDAN scheme needs changes to be much more effective. One option could make regional connectivity seasonal at first, to make certain routes sustainable slowly rather than trying to kick-start infrastructure development and hope it works out.
The government has allowed 100% FDI in domestic scheduled air transport, air transport services and regional air transport. But so far, no foreign companies have showed any interest. Over the last few months, media reports have indicated that Qatar Airways is an interested party. However, when responding to a question on the interest shown by Qatar Airways in India’s airline industry, Raju said that they are not speculating and that the media must not draw any conclusions.
The Air India Crisis
Air India has been a long-debated subject within India’s aviation industry. The airline currently has debt of Rs 46,000 crore, which is larger than the entire government outlay for MGNREGA. In recent times, there has been a stronger push for potential disinvestment: the Niti Aayog has brought it up, this year’s Economic Survey has done so as well and a few days ago, finance minister Arun Jaitley hinted at such a prospect.
However, the civil aviation minister was non-committal. Dismissing questions about potential disinvestment when it comes to Air India, Raju said “We are proud of India.” He added that that in no way is the aviation ministry looking forward to distance itself from the airline. The counter argument here that experts bring up is carrying forward with Air India doesn’t gel with Modi’s minimum government, maximum governance plan.
On Wednesday, Livemint reported that the ministry is indeed working on a revival plan for Air India that will see an injection of another Rs 25,000 crore over the next ten years.
Foreign travel and CBI probe
The present Prime Minister has made 13 foreign visits with a travel time of 55 days. No bills for as many as eight visits have been received by the government: four bills are under process and only one has been computed. This, experts say, raises serious question about the work culture of Air India. An industry analyst, who declined to be identified, said “The idea of a permanent job has made the staff of Air India quite carefree. Disinvestment will produce a sense competitiveness among the staff, which will result in better on-board and off-board results.”
Sinha, however, claimed that Air India has seen pretty decent growth last year in comparison to previous years.
Both ministers also dodged questions on current CBI probe into irregularities around Air India buying aircraft during the previous UPA government regime.
“Those are the things of the past, we should now look for a better future. The present ministry will fully co-operate with the CBI in such probes,” the minister said.
The ministry’s report card, therefore, has laid down the various developments that can be looked forward to, but without corresponding plans of action. Sinha quipped: “The way in which the Prime Minister Modi led government works is by reforming, performing, transforming and informing. We have done the other three, now we are informing.”