Gaikwad was barred by Air India and leading private carriers after he assaulted a staffer of the national airline at the Delhi airport last month.
Following direction from the ministry, Air India lifted the ban yesterday and private airlines followed suit today.
In a series of tweets, Minister of State for Civil Aviation Jayant Sinha said unruly behaviour by air passengers will result in severe consequences.
This is the first official response from the ministry after the airlines revoked the ban on Gaikwad -- a development that had become a political hot potato after the Shiv Sena, an ally at the Centre, sought lifting of the ban.
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Sinha emphasised that the ministry is strengthening rules so that a national no-fly list can be implemented so that such incidents can be prevented and safety improved.
About the incident involving the Shiv Sena member, the minister said Gaikwad had apologised and provided an undertaking that such incidents would not reoccur.
"Therefore AI (Air India) has been advised to revoke his ban... Police investigations regarding Gaikwad's conduct during the March 23 incident are under way and the law will take its own course," Sinha said.
He noted that case has been registered against Gaikwad, including sections 308 (culpable homicide) and 355 (assault).
"A flying ban is meant to prevent future unruly behaviour, not to punish past behaviour. We now have an undertaking for future behaviour," he added.