The newly-established Airports’ Economic Regulatory Authority (AERA) is pushing for an amendment to the current legislation that will allow the agency to retain money raised as fees and penalties from market players. This will lend financial autonomy to the regulator. All regulators — including the Reserve Bank, Sebi, IRDA and TRAI — manage their expenses through their own resources (fees charged from players under their purview).

The AERA Act, in its existing form, makes the airports regulator dependent on Central grants for its finances. The amendment will propose grant of powers to AERA to levy charges and appropriate these so as to be self-sufficient. “We are considering bringing in legislation, amending the current Act, by which the newly-formed authority can levy charges and fees,” a senior government official told The Indian Express.

The Act, which was passed last year, states that the Central government may, after due appropriation, make to the authority grants of such sums of money as are required to be paid for the salaries and allowances payable to the chairperson and other members, and the administrative expenses. Former consumer affairs secretary Yashwant S Bhave was recently appointed chairperson of AERA.

Aviation industry experts opine that financial autonomy for the authority will play an important role in ensuring transparency and functional independence of the regulator. “The Indian regulator could take a cue from UK’s civil aviation authority, which is funded by all the users and stakeholders like airports. Within the authority, the government can appoint the chairperson and members to handle various regulatory functions. Essentially, the government should play the role of an enabler and policy maker and financial autonomy should be provided to the regulator,” said Centre for Asia Pacific Aviation chief executive officer Kapil Kaul.

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