Hijacking authority

Given the rapid pace at which the country's air traffic is growing and the growing number of players in the industry, the Bill to set up an Airports Economic Regulatory Authority of India is an idea whose time has come. It is also in keeping with the government's overall philosophy in most infrastructure areas, of getting an independent regulator to take care of the interests of both consumers and infrastructure players. Indeed, since the four major airports at Mumbai, Delhi, Bangalore and Hyderabad are now being run by private companies, the regulator should have been in place long ago. Still, it is better late than never.

However, while such sectoral regulators are supposed to be independent, the government (which means both ministers and bureaucrats) has been steadily chipping away at regulators' powers and making them subject more and more to government wishes. This undermines the very concept of an independent and impartial regulator, especially since the government is often an interested party in all key issues on which the regulator has to apply his mind (government-owned companies are substantial players in telecom, electricity and petroleum, to take three prominent examples).

In the specific case of the Bill to set up an airport regulator, there are some serious issues that need to be sorted out if the regulatory authority is to function effectively. Most importantly, the government has sought to curb the regulator's freedom. For instance, the airport regulator can be removed by the government after an internal inquiry "" in the case of the appellate body, by contrast, the chairman and members can be removed only after a reference is made to the Supreme Court. In the case of the telecom regulator, interestingly, no dismissal can take place without reference to the Supreme Court. Having realised its "mistake", the government has tried to make sure that regulators can be brought to heel quickly. The recently-appointed petroleum regulator too can be dismissed after an internal inquiry. Worse, the central government reserves the right, under the latest Bill, to issue "directions" to the regulator and these directions are to be binding upon the regulator "" indeed, the government will decide what are matters of policy and what are not. In other words, the government can pretty much decide just how much power it wants to give the supposedly independent regulator.

Interestingly, the Delhi High Court has ruled that the Delhi government's decision to give instructions to the state's electricity regulator was incorrect and pointed out that its chairman had objected but had been overruled. If all this isn't bad enough, and the regulator still decides to act independently, the government reserves for itself the right, "in the public interest", to supersede the regulator. While this is to be restricted to a maximum of six months, there are provisions under which the period can be extended further. Before Parliament is asked to pass the airport regulatory Bill, these issues need to be clarified and changes made so that the country, all air passengers, the airports and the aviation industry as a whole have a truly independent regulator.