1)Draft Aviation Policy:-

*Note – The Policy is large and it has some details that are not required to be remembered . What is important is that the terms and the various components associated with Aviation industry, once one knows the components it will be helpful to frame an answer keeping them in mind rather than writing answers  without substance.Hence , we request you to go through the article in detail but remember only the key components.

 

  • India has the potential to be among the global top three nations in terms of domestic and international passenger traffic. It has an ideal geographic location between the
    eastern and western hemisphere; a 300million strong middle class and a rapidly growing economy. Despite these advantages, the Indian aviation sector has not
    witnessed the level of growth it should have and at present it is ranked 10th in the world
  • The Government has proposed to take flying to the m
    asses by making it affordable.
    For example, if every Indian in middle class income bracket takes just one flight per annum, it would result in a sale of 300 million tickets, a big jump from the 70 million
    domestic tickets sold in 2014-15. This will be possible if the air-fare, especially on the regional routes is brought down to an affordable level.The reduction in costs will
    requireconcessions by the stakeholders, primarily theCentral and State Governments and Airports.
  • Vision: To create an eco-system to enable 30 crore domestic ticketing by 2022 and 50 crore by 2027. Similarly, international ticketing to increase to 20 crore by 2027.
  • Mission: Provide safe, secure, affordable and sustainable air travel with access to variousparts of India and the world
  • Objectives:-
    i)Ensure safe, secure and sustainable aviation industry through use of technology and effective monitoring
    ii)Enhance regional connectivity through fiscal support and infrastructure development.
    iii)Enhance ease of doing business through deregulation , simplified procedures and e-governance
    iv)Promote the entire aviation sector chain: cargo, MRO, general aviation, aerospace,manufacturing and skill development
  • Safety:-
    • DGCA will strive to create a single-window system for all aviation related transactions, queries and complaints. The services rendered by DGCA will be fully
      automated by 1 April 2016 by implementing eGCA project on priority
    • DGCA will be allowed to recruit its personnel directly for posts which are sanctioned as per recruitment rules by exempting them from UPSC for this purpose.
  • Regional Connectivity
    • MoCA will target an all-inclusive airfare not exceeding Rs 2500 per passenger,indexed to inflation for a one-hour flight on RCS(Regional Connectivity Scheme) routes.
    • This will be implemented by way of:
      i)Revival of un-served or under-served aerodromes and airstrips.
      ii)Concessions by different stakeholders:
      iii)Viability Gap Funding (VGF) for scheduled commuter airlines
      iv)Cost-effective security solutions by BCAS and State
      Governments
  • 5/20 rule:-
    • In October 2004, the Union Cabinet stipulated that for Indian carriers to fly abroad,they must fly on domestic routes for 5 years and have a fleet of 20 aircraft. MoCA is proposing to introduce the concept of Domestic Flying Credits (DFC). The government invites suggestions on three possible policy options:
      i)5/20 Rule may continue as it is,
      OR
      ii)5/20 Rule will be abolished with immediate effect,
      OR
      iii)Domestic airlines will need to accumulate 300 DFC before commencing flights to SAARC countries and countries with territory located entirely beyond a 5000 km
      radius from New Delhi. They will need to accumulate 600 DFC before starting flights to the remaining parts of the world.
    • Airlines will be free to trade DFCs with other airlines under intimation to DGCA
  • Bilateral traffic rights:-
    • The bilateral rights have their origin in the Chicago Convention 1944. India has Air Service Agreements (ASA) with 109 countries covering aspects relating to the
      number of flights, seats, landing points and code-share. Utilization of bilateral rights at any point of time differs from country to country and is subject to periodic
      renegotiation. In this regard, the Policy will be as follows:-
      • The government plans to liberalize the regime of bilateral rights leading to greater ease of doing business and wider choice to passengers
      • The government will enter into an ‘Open sky’ ASA on a reciprocal basis with SAARC countries and countries with territory locate d entirely beyond a 5000 km radius from New Delhi
      • Landing rights at other airports under the existing ASA will continue to be honoured.
      • Increase in FDI in airlines from 49% to above 50% will be examined if the Government decides to go in for open skies for countries lying within 5000 km radius
  • Code Share Agreements (CSA) :-

    • A Code-Share Agreement between two airlines allows one airline (‘Marketing airline’) to sell seats on a flight run by another airline (‘Administrating airline’), with the airline code and flight number of the marketing airlines. This helps in seamless connectivity for passenger. In this regard, the Policy will be as follows:-
      • Indian carriers will be free to enter into code-share agreements with foreign carriers for any destination within India on a reciprocal basis.
      • International codeshare between Indian and foreign carriers will be completely liberalized, subject to the ASA between India and the relevant country
  • Maintenance, Repair and Overhaul (MRO):-
    • Maintenance, Repair and Overhaul (MRO) The MRO business of Indian carriers is alone around Rs 5000 crore, 90% of which is currently spent outside India – in Sri Lanka, Singapore, Malaysia, UAE etc. Given our technology base, the government is keen to develop India as an MRO hub in Asia,attracting business from foreign airlines. Accordingly, the following steps will be taken:-
      • Service Tax on output services of MRO will be zero-rated
      • Aircraft maintenance tools and tool-kits will be exempt from Customs duty.
      • Foreign aircraft brought to India for MRO work will be allowed to stay for the entire period of maintenance or up to 6 months, whichever is lesser, provided it undertakes no commercial flights during the stay period.
  • Route Dispersal Guidelines (RDG):-
    • RDG was introduced in 1994 to provide air connectivity to J&K, NE, island territories,tier-2 and tier-3 cities, by way of internal cross-subsidy by airlines, using their profits on the trunk routes (12 in number). RDG has succeeded in creating connectivity to remote locations. Capacity actually deployed on Cat II and III is in excess of the RDG threshold, highlighting the business potential in these regions.
  • Helicopters :-
    • Helicopters play a key role in remote area connectivity, intra-city movement, tourism,law enforcement, disaster relief, search and rescue, emergency medical evacuation, etc. India currently has less than 300 civilian helicopters, as compared to Brazil (1300)
      • Separate regulations for helicopters will be notified by DGCA by 1 April 2016, after due stakeholder consultation
      • Helicopters will be free to fly from point to point without prior ATC clearance in airspace below 5000 feet and areas other than prohibited and restricted ones
      • The government will promote the use of seaplanes for growth of tourism and regional connectivity, along India’s 7500 km coastline
  • Airports Authority of India (AAI):-
    • Out of 125 airports of AAI, about 95 are operational and 71 have scheduled operations as of July 2015
  • Air Navigation Services (ANS):-
    • With the launch of GAGAN,India becomes the fourth nation in the world to use satellite-based navigation system.
    • New aircraft being registered in India from 1st April 2017 will mandatorily have to be GAGAN enabled.
  • Air cargo:-
    • Promotion of Air cargo is a key objective of the government, given its importance from a ‘Make in India’, e-Commerce and exports perspective . Revenue from air cargo helps airlines subsidize the cost of passenger tickets and take flying to the masses. Air cargo has a high employment potential, especially for semi-skilled workers. Currently air cargo volumes in India are extremely low as compared to other leading countries due to high charges and high turnaround time.
  • Sustainable aviation:-

    • MoCA will strive to develop a sustainable Indian aviation industry. It will work with DGCA and industry stakeholders to develop an action plan for making all Indian
      airports carbon neutral by 1 April 2030.
  • Aviation education and skill building:-
    • The government will expedite the commencement of courses by the National Aviation University (NAU).


2)India’s First New Stealth Submarine Begins Sea Trials :-

  • The Scorpene-class diesel electric submarine Kalvari has begun extensive sea trials in the waters off Mumbai this week
  • Kalavari, the first of Scorpene class submarines being manufactured at Mazagon Dock Shipbuilders Ltd (MDL), was recently set afloat in the Mumbai naval dockyard.
  • Scorpene-class submarine:
    • The Scorpene class submarines are a class of diesel-electric attack submarine jointly being developed by the French DCN and the Spanish company Navantia and now by DCNS.
    • It features diesel propulsion and an additional air-independent propulsion (AIP) system.
    • Air-independent propulsion:-
      • Air-independent propulsion (AIP) is any technology which allows a non-nuclear submarine to operate without the need to access atmospheric oxygen (by surfacing or using a snorkel).
      • It can augment or replace the diesel-electric propulsion system of non-nuclear vessels.
      • It is based on the combustion of stored oxygen and ethanol to augment battery-powered propulsion.

3)Project Loon Of Google:-

  • Project Loon is a research and development project being developed by Google X with the mission of providing Internet access to rural and remote areas.
  • The project uses high-altitude balloons placed in the stratosphere at an altitude of about 32 km to create an aerial wireless network with up to 3G-like speeds
    • The balloons are maneuvered by adjusting their altitude to float to a wind layer after identifying the wind layer with the desired speed and direction using wind data from the National Oceanic and Atmospheric Administration (NOAA).
    • Users of the service connect to the balloon network using a special Internet antenna attached to their building.
    • The signal travels through the balloon network from balloon to balloon, then to a ground-based station connected to an Internet service provider (ISP), then onto the global Internet.
  • Significance of Stratosphere :- Google asserts that the stratosphere is advantageous because of its relatively low wind speeds and minimal turbulence. Google also claims that it can model, with reasonable accuracy, the seasonal, longitudinal, and latitudinal variations in wind speeds within the 18–25 km stratospheric layer.

 


4)Alternate Train Accommodation Scheme (ATAS) called “VIKALP”  :-

  • A Major Passenger Friendly move to Provide Confirmed Accommodation to Waitlisted Passengers in Alternate Trains
  • With a view to provide confirmed accommodation to waitlisted passengers and also to ensure optimal utilisation of available accommodation, a scheme Alternate Train Accommodation Scheme(ATAS) called “VIKALP” has been conceptualised and is to be introduced

 

 

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  • Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.

    Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.

    The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.

    Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.

    In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.

    Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.

    “Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.

    India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.

    With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.

    They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.

    India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.

    As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices

    The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).

    The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.

    Here is an approximate break-up (in Rs):

    a)Base Price

    39

    b)Freight

    0.34

    c) Price Charged to Dealers = (a+b)

    39.34

    d) Excise Duty

    40.17

    e) Dealer Commission

    4.68

    f) VAT

    25.35

    g) Retail Selling Price

    109.54

     

    Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.

    So the question is why government is not reducing the prices ?

    India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.

    However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.

    That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.

    Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.

    Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.

    But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.