Comprehensive News Analysis - 22 April 2017

1. For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely-
     a) the imposition, abolition, remission, alteration or regulation of any tax;
     b) the regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;
     c) the custody of the consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;
    d) the appropriation of moneys out of the consolidated Fund of India;
    e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;
    f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or
    g) any matter incidental to any of the matters specified in sub clause (a) to (f)

2. A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes

3. If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final

4. There shall be endorsed on every Money Bill when it is transmitted to the Council of States under Article 109, and when it is presented to the President for assent under Article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill

• Civil Aviation Ministry’s Regional Connectivity Scheme
• Main motive: A major step towards making flying a reality for the small town common man. UDAN is an innovative scheme to develop the regional aviation market. It is a market-based mechanism in which airlines bid for seat subsidies. This first-of-its-kind scheme globally will create affordable yet economically viable and profitable flights on regional routes so that flying becomes affordable to the common man even in small towns.
• Features:
• The scheme UDAN envisages providing connectivity to un-served and under-served airports of the country through revival of existing air-strips and airports. The scheme would be in operation for a period of 10 years.
• UDAN has a unique market-based model to develop regional connectivity. Interested airline and helicopter operators can start operations on hitherto un-connected routes by submitting proposals to the Implementing Agency. The operators could seek a Viability Gap Funding (VGF) apart from getting various concessions. All such route proposals would then be offered for competitive bidding through a reverse bidding mechanism and the route would be awarded to the participant quoting the lowest VGF per Seat. The operator submitting the original proposal would have the Right of First Refusal on matching the lowest bid in case his original bid is within 10% of the lowest bid. The successful bidder would then have exclusive rights to operate the route for a period of three years. Such support would be withdrawn after a three year period, as by that time, the route is expected to become self-sustainable.
• The selected airline operator would have to provide a minimum of 9 and a maximum of 40 UDAN Seats ( subsidized rates )on the UDAN Flights for operations through fixed wing aircraft and a minimum of 5 and a maximum of 13 Seats on the Flights for operations through helicopters. On each such route, the minimum frequency would be three and maximum of seven departures per week. Route networks would also be encouraged under the scheme to achieve economies of scale and optimal usage of aircraft.
• The fare for a one hour journey of appx. 500 km on a fixed wing aircraft or for a 30 minute journey on a helicopter would now be capped at Rs. 2,500, with proportionate pricing for routes of different stage lengths / flight duration.
• This would be achieved through (1) a financial stimulus in the form of concessions from Central and State governments and airport operators and (2) a Viability Gap Funding to the interested airlines to kick-off operations from such airports so that the passenger fares are kept affordable.
• Central Government would provide concessions in the form of reduced excise duty, service tax.
• State governments will have to lower the VAT on ATF to 1% or less, besides providing security and fire services free of cost and electricity, water and other utilities at substantially concessional rates.
• Airport operators shall not impose Landing and Parking charge and Terminal Navigation Landing Charges in addition to discounts on Route Navigation Facility Charges.
• A Regional Connectivity Fund would be created to meet the viability gap funding requirements under the scheme. The RCF levy per departure will be applied to certain domestic flights.
• The partner State Governments (other than North Eastern States and Union Territories where contribution will be 10 %) would contribute a 20% share to this fund. For balanced regional growth, the allocations under the scheme would be equitably spread across the five geographical regions of the country viz. North, West, South, East and North-east.
• The States have a key role under the scheme. The selection of airports where UDAN operations would start would be done in consultation with State Government and after confirmation of their concessions.
• The UDAN is likely to a give a major fillip to tourism and employment generation in the hinterland. Through introduction of helicopters and small aircraft, it is also likely to significantly reduce travel timings in remote and hilly regions, as well as islands and other areas of the country.