The much-anticipated cabinet reshuffle has led to a change in the corner office at the Ministry of Civil Aviation (MoCA). Jyotiraditya Scindia has been appointed as the new minister with an upgrade in rank. He replaces the incumbent Hardeep Singh Puri, who has been elevated to the Cabinet Rank and made in-charge of Petroleum and Natural Gas. Puri is a member of Rajya Sabha and represents Uttar Pradesh.
Scindia is also a member of the Rajya Sabha and represents Madhya Pradesh. He was instrumental in toppling the Congress government and helping the BJP return to power in the central Indian state. Scindia occupies the post which his late father Madhavrao Scindia once occupied, from 1991 until 1993 in the PV Narasimha Rao cabinet.
Scindia represented the Guna Lok Sabha constituency until 2019 when he was defeated. He has held charge as Minister of State for Power in the Manmohan Singh ministry in the past.
The ministry also gets a MoS in form of Gen. VK Singh who has held various portfolios under Prime Minister Narendra Modi in both tenures. Gen. Singh represents Gaziabad. He will also be MoS for road transport.
Changes in last seven years
When Narendra Modi was sworn in as the Prime Minister in 2014, Ashok Gajapathi Raju from ally Telugu Desam Party (TDP) was sworn in as the minister. With TDP withdrawing support to the government in March 2018, Suresh Prabhu became the Minister for Civil Aviation. Both these positions were with Cabinet Rank. All along there were two Ministers of States, first Mahesh Sharma and later Jayant Sinha.
In 2019, in the second tenure of the BJP-led government - the Ministry of Civil Aviation saw Hardeep Singh Puri lead it but as Minister of State with Independent Charge.
The new minister has his task cut out with the aviation sector being one of the worst affected sectors due to the pandemic. With the change in leadership, there have been changes in focus areas. The Air Sewa portal which was referred to frequently by former ministers is nowhere in the news and actively pushed by the current one.
Immediate challenges for the new minister
Transition to free market - Since flights restarted on May 25, 2020, the industry has been reeling under a capacity cap as well as a floor and ceiling price for air fares. No other industry has been put under such barriers post-COVID-19. While rules do allow the government to do this, it is detrimental in the long run. The outgoing minister had made multiple statements on when he expects the air traffic to be back to pre-COVID19 levels but none of them saw the light of the day. A smooth transition to the free market is in the larger interest of the sector.
Air India disinvestment - The investment climate has changed a lot since the topic was first discussed. While it is often said that we are in the last stages and a winner may be announced in the next couple of months, it remains unclear how many made it to this stage and what will be the way forward. Until then a razor-sharp focus is needed to ensure that the process is not derailed since this is the closest any government has ever got to divestment in the national carrier. The future of Alliance Air on its own will also have to be charted out, lest it becomes another Air India!
Regional Connectivity Scheme - The RCS - UDAN has been a pet scheme of the Prime Minister. Unfortunately, it has not seen the kind of success which it should have. After multiple rounds of bidding, the operational routes remain less than 50 percent of what was bid out. Airlines like Air Deccan, Air Odisha have gone belly up while Spicejet has cancelled multiple routes which it started. The aim of having 100 new airports (including seaports and heliports) is also turning out to be a pipedream.
Privatisation of airports - The next set of privatisation of airports started rolling just before the pandemic hit. This has meant that there is a delay in take-over of airports by Adani Group which won the concession agreement at these airports. Further privatisation has been in the pipeline for a while but the reduced air traffic has meant that it would be difficult to attract more players.
Airport Infrastructure - The airport infrastructure in the country was being utilised at its peak pre-pandemic. Mumbai has run out of capacity and the case is no different at most other airports which are in top 15 in the country. Lack of space to expand civil enclaves at defence airports has meant that flight operations can't grow beyond a limit at Pune, Goa, Vizag, Port Blair and Jammu amongst others.
ATF - The demand to move Aviation Turbine Fuel (ATF) under the GST regime has been on for years together! Even before GST was implemented, there were demands to have a flat rate of taxation across the country. Neither has happened. As fuel prices start inching upwards, it is causing more pain for the airlines than ever before.
Air Safety - After a long gap, India experienced a fatal crash last year at Calicut. The report is still pending. An audit from ICAO and US regulator FAA is on the horizon. Any adverse observations will lead to airlines from India not being able to add new routes to the United States.
Tail Note
The next general election is three years away. It has often been said that earlier the praja wanted a railway station but now everybody wants an airport! With fiscal deficit a challenge and little that can be offered to airlines directly to tide over the crisis, all eyes will be on Mr. Scindia to see how he navigates through rough weather for a smooth landing.
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