Civil aviation n startup

NATIONAL CIVIL AVIATION POLICY

Instructor: Harveer Singh

AGENDA

National Civil Aviation Policy

StartUp India

Defense Procurement Policy

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LETS START!

What is 5/20 Rules wrt Aviation in

India? Analyse the changes being

proposed in New Policy.

What are the Major Features of

NCAP? Explain its possible impact on

Indian Economy.

3 HARVEERSIR for GSSCORE

VISION

To prepare the ground for

30-crore domestic ticketing

by 2022 and 50 crore by

2027, besides targeting

international ticketing at 20

crore.


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.


REGIONAL CONNECTIVITY SCHEME

Cap of 2500 per flying hour to small town route.

Currently around 75 out of 450 airstrips/airports

have scheduled operations.

“demand driven” base Revival of the remaining

airstrips. grand plans to revive 50 airports in the next two years.

2-per cent cess on all domestic trunk route tickets

as well as international tickets.

the funds collected through the cess, which the

government expects to be Rs.1,500 crore a year, will be

used to subsidise flights on small town routes (RCF)


ROUTE DISPERSAL GUIDELINES

Uttarakhand and Himachal Pradesh included in Category II

Category I to be rationalized based on a transparent criteria,

i.e., flying distance of more than 700km, average seat factor of

70% and above and annual traffic of 5 lakh passengers

The percentage of Cat.I traffic to be deployed on CAT III will

be 35% of Cat-I.

There view of routes will be done by MoCA once every5 years

Withdrawal or revision of domestic operations to and within

North East Region etc, subject to full compliance of RDG, can

be done under prior intimation to MoCA at least three months

before withdrawal or revision of the service


BILATERAL TRAFFIC RIGHTS

GoI will enter into 'Open Sky' ASA on a

reciprocal basis with SAARC countries and

countries located beyond 5000 km from

Delhi


GROUND HANDLING POLICY

The airport operator will ensure that there will be three Ground

Handling Agencies (GHA) including Air India's subsidiary/JV at

all major airports as defined in AERA Act

At non-major airports, the airport operator to decide on

the number of ground handling agencies, based on the

traffic output, airside and terminal building capacity

All domestic scheduled airline operators including helicopter

operators will be free to carry out self-handling at all

airports through their regular employees

Hiring of employees through manpower supplier or contract


AIRPORT PPP/AAI

Encourage development of airports by

AAI, State Governments, the private sector or in

PPP mode

Future tariffs at all airports will be calculated on a

'hybrid till' basis, unless specified otherwise in

concession agreements.

Increase non-aeronautical revenue by better

utilisation of commercial opportunities of city side

land.

AAI to be compensated in case a new greenfield

airport is approved in future within a 150 km radius

of an existing unsaturated operational AAI airport.


AVIATION SECURITY, IMMIGRATION AND

CUSTOMS

Allow Indian carriers to provide security services to other

domestic airlines subject to approval of BCAS

Encourage use of private security agencies at airports for non-

core security functions to be decided in consultation with

MHA

Such agencies should be registered under the Private

Security Agencies (Regulation) Act, 2005 and will also be

separately accredited by BCAS

Subject to minimum benchmarks being met, security

architecture at the different airports will be proportionate to the

threat classification and traffic volume.


Safety violations will be treated with zero-tolerance.

Directorate General of Civil Aviation (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.

DGCA will carry out a comprehensive review of all

civil aviation requirements (CAR) once every 5

years starting from FY 2016-17.


MAINTENANCE, REPAIR AND OVERHAUL

The MRO business of Indian carriers is around Rs 5000

crore, 90% of which is currently spent outside India.

In the budget for 2016-17, customs duty has been

rationalised and the procedure for clearance of goods

simplified. Further incentives proposed in the policy to give a

push to this sector:

MoCA will persuade State Governments to make VAT zero-

rated on MRO activities

Provision for adequate land for MRO service providers will

be made in all future airport/heliport projects where potential

for such MRO services exists

Airport royalty and additional charges will not be levied on

MRO service providers for a period of five years from the date

of approval of the policy


AVIATION EDUCATION AND SKILL BUILDING

Estimated direct additional employment

requirement of the Civil Aviation Sector by

2025 is about 3.3 lakh.

Support to the Aviation Sector

Skill development.

There are nearly 8000 pilots holding CPL

without regular employment. MoCA will

develop a scheme with budgetary support

for Type- rating of Pilots.


CODE SHARING AGREEMENT

Indian carriers will be free to enter into code-share agreements with foreign carriers for any destination within India on a reciprocal basis.

No prior approvals from MoCA will be required. Indian carriers simply need to inform MoCA 30 days prior to starting the code-share flights.

A review will be carried out after 5 years to consider the requirement of further liberalization in code-share agreements and to drop the requirement of reciprocity.


HYBRID TILL MODEL

In the single till, all the earnings from both aeronautical and non-aeronautical sources are added and then the charges are decided.

In double till, earnings from only aeronautical services are considered while deciding the rates.

Under the hybrid model, the airport operator adds a part of the non-aeronautical (duty-free shops, hotel, restaurant, among others) revenue and the total revenue from the aeronautical (landing, parking and ground handling charges) side to compile total earnings. The aeronautical rates are decided on the basis of total earnings. In the case of the airports in Delhi and Mumbai, 30 per cent of the non-aeronautical revenue is added in the total revenue.


Currently the Hybrid Model is followed in

Delhi and Mumbai. With this Policy, It would

be extended to all the airports.

Global airlines body IATA expressed

"concern" over the hybrid model for fixing

charges at airports built under PPP model,

saying it would make Indian airports more

expensive and render tariff regulator

"toothless“.


5/20 RULE

Domestic Flying Credit (DFC): Available

Seat Kilometer (ASKM) deployed by the

airline on domestic routes divided by 01

crore.

3 Suggestions for 5/20 Rules

5/20 Rule may continue as it is, OR

ii) 5/20 Rule will be abolished with immediate

effect,

300 DFC for SAARC, 600 DFC for Global Ops.


FINAL POLICY STATEMENT ON 5/20.

All airlines can now commence

international operations provided that they

deploy 20 aircraft or 20% of total capacity

(in term of average number of seats on all

departures put together), whichever is

higher for domestic operations.


INDIAN AVIATION: HERE AND THERE

there are as many as 125 Airports, which include 11

International Airports.

The Airports Authority of India (AAI) manages all

major airports throughout the country.

Indian airlines carry nine times as many

passengers today as they did before deregulation in

1994. No-frills carriers, unheard of two decades

ago, provide two-thirds of domestic capacity.

IndiGo, whose bulging order-book of 430 aircraft

outweighs any other order in recent times.


Currently India has 33 "non-

operational" airports, according to

the Airports Authority of India.

Popularly dubbed “ghost airports”.

India to build 200 low-cost airports

over the next 20 years


SOURCE: IBEF22 HARVEERSIR for GSSCORE

FINAL WORD

The ICAO estimated that $100 spent on air

transport produce benefits worth $325 for

the economy and 100 additional jobs in air

transport result in 610 new economy wide

jobs

4.5% of global GDP to the air transport

component of civil aviation

Increasing disposable incomes, fall in prices

of aircraft turbine fuel (ATF), increase in

tourism, and visa reforms have placed India

in a unique position.23 HARVEERSIR for GSSCORE

A BIG THANK YOU


TOPIC: START-UP INDIA

TO PONDER

Can India genuinely

become a global hub for

innovation?

Can start-ups become

the engine of India’s

growth?27

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START-UP INDIA

The profits of Startup initiatives are exempted

from income tax for a period of 3 years.

labour laws: No inspection will be conducted for

a period of 3 years.

Environment laws:Startups falling under 'white

category' would be able to self-certify and only

random checks would be carried out

patents, trademarks or designs fee to be borne

by Govt.

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START-UP INDIA….CONTD

Fund: initial corpus of Rs.2,500 crore and a total

corpus of Rs.10,000 crores over a period of 4

years.

Credit guarantee mechanism through National

Credit Guarantee Trust Company (NCGTC) or

SIDBI is being envisaged with a budgetary

corpus of INR500 crore per year for the next

four years.

capital gains Exemptions.

prior experience/turnover” criteria may be

relaxed.29

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Launch of Atal Innovation Mission for

Entrepreneurship and Innovation promotion.

Tax Exemption for Venture Capitalists.

incubators across the country in public private

partnership.

7 new Research Parks :To promote innovation

through incubation and joint R&D efforts

between academia and industry’

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Top 50 companies in India have

been requested to contribute

towards strengthening the

incubation facilities in the country

through their Corporate Social

Responsibility (CSR) initiatives.

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ELIGIBILITY

The firm incorporated should be less than

five years old

Annual Revenue of less than Rs 25 crore

Needs to get approval from inter-ministerial

board to be eligible for tax benefits

Get recommendation from an Incubator

recognised by government, domestic

venture fund or have an Indian patent

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PROGRESS SO FAR

Nidhi: National Initiative for

Development and Harnessing

Innovations (NIDHI), an umbrella

programme which aims to nurture

ideas and innovations in the startup

ecosystem.

the ministry will be infusing Rs 500

crore into the programme in the next

few years 33

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PROGRESS SO FAR..CONTD..

PRAYAS (Promoting and Accelerating

Young and Aspiring Innovators & Startups),

is one of the components of NIDHI. The

idea is to encourage innovators by providing

access to the Fabrication Laboratory as well

as a grant of up to Rs10 lakh.

Additionally, there is the Seed Support

System, providing up to Rs 1 crore per

startup and implemented through

technology business incubators.34

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the department has launched more than

100 technology business incubators in

academic and R & D institutions which

include IITs, IIMs, NITs, and other

institutions.

Every incubator focuses on a technology

domain, and all of them combined house

more than 2,000 startups and offer a total

incubation space of approximately seven

lakh sqft.35

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Ministry of Electronics and Information Technology

(MeitY) is working

To boost domestic electronic manufacturing, the

government plans to incubate 50 early-stage

startups and

To create at least five global companies in the

electronic systems design and manufacturing

(ESDM) sector over the next five years.

Electropreneur Park has been setup at University of

Delhi, South Campus to incubate 50 early stage

startups and create atleast 5 global companies over

a period of 5 years. 36

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MINISTRY OF ELECTRONICS AND

INFORMATION TECHNOLOGY (MEITY)

CSR: ONGC set up a Startup Fund of

100 Crores.

A total of 728 applications had been

received till July 18, 2016 for ‘startup’

recognition,Commerce and Industry

Minister Nirmala Sitharaman said in a

written reply in the Rajya Sabha.

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ARE MORE STARTUPS REALLY GOOD FOR

ECONOMIC GROWTH?

India is amongst the five largest

startup communities of the world, and

the youngest of all.

Investors pumped $9 billion into Indian

startups in 2015. The same year,

China saw $36 billion and the US saw

more than $500 billion in funding.

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Myth: more entrepreneurs means

more businesses, more jobs,

more competition, and more

innovation.

Fact: the relationship between per

capita income and

entrepreneurship is mostly

negative (Gallup) 39

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when the initial push of the investors and VCs

fizzles out and the constant stream of finance also

isn’t readily available so 2-3 years Startups Die Out.

Need for Sustainable Jobs.

Learning Curve of the Economy.

it’s the “scale-ups” that actually have a telling effect

on the economy, society and innovation in a country

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FINAL SAY..

NASSCOM Start-up Report 2015, start-ups created 65,000 new jobs in 2014 and by 2020, the number is expected to touch 2,50,000.

That’s an ambitious plan and as of now, driven almost entirely by private sector initiative

If India succeeds in establishing a pro-active start-up eco-system as intentioned, then the potential for new job creation will be far greater than NASSCOM’s projections.

The international business community accepts India as one of the most attractive destinations for investments and of late, has discovered India’s potential for innovation and creativity. 41

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FINAL SAY..CONTD..

The last three years has seen significant

scale up in international investments in

start-ups and this has led to skyrocketing

valuations, exceeding $ 1 billion in some

cases, a phenomena that would have been

unbelievable just five years ago.

And this has been achieved with little or no

support from the government.

Thus with the support of the govt, India can

transform itself and lives of its people. 42

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FINAL SAY..CONTD..

Synergising 'Startup India' with 'Make in India' and 'Digital India' initiatives has the potential to expand the domestic ecosystem for not only new entrepreneurs but also for the wider economy.

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STAND-UP INDIA

The Stand Up India scheme is anchored by

Department of Financial Services (DFS) to

encourage greenfield enterprises by

SC/ST and women entrepreneurs.

It will facilitate at least two such projects per

bank branch, on an average one for each

category of entrepreneur.

Target: at least 2.5 lakh approvals in 36

months

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CONTD….STANDUP INDIA

Refinance window through Small

Industries Development Bank of India

(SIDBI) with an initial amount of Rs

10,000 crore.

Provides for handholding support for

borrowers both at the pre loan stage

and during operations.

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CONTD….STANDUP INDIA

Loans repayable up to 7 years and

between Rs 10 lakh to Rs 100 lakh for

greenfield enterprises in the non farm

sector set up by such SC, ST and

Women borrowers.

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TOPIC: DEFENCE PROCUREMENT

This PPT is for classroom learning purpose only. Learners/Aspirants areexpected to supplement the lecture with the ppt. Aspirants are also expected to go through standard Material.

The content is taken from various daily and weekly publications. Due care has been taken in preparing the material but the tutor or the Institute would not be responsible for any error or consequences arising out of it.

Suggestion(s)/correction(s)/feedback is/are welcome at

[email protected]

By: Harveer Singh

ISSUES IN DEFENCE PROCUREMENT FOR

INDIA

Black Listing of the Firms due to

Corruption Cases.

Technology Shortcomings

Opaque Procurement process due to

sensitive technology

Lack of Market price signalling leading

to corruption

Lack of Indigenous research, design

and development.48 HARVEERSIR for GSSCORE

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India remains the world’s largest importer of arms,

importing 14% of global imports of weaponry

between 2011-2015.

India’s primary supplies are Russia, Israel, France,

and the United States.

The government of India is looking to reduce

dependency on foreign arms manufacturers and to

catalyze domestic manufacturing capabilities.

The ‘Make in India’ initiative is seen as a launch

pad for the structural and regulatory changes

needed to boost India’s defence-industrial base.

HARVEERSIR for GSSCORE

DHIRENDRA SINGH COMMITTEE (MAY

2015)


DHIRENDRA SINGH COMMITTEE..CONTD..

51

The committee proposed three models for cooperation

with the private sector: Strategic Partnerships,

Developmental Partnerships and Competitive

Partnerships.

Within this model, there would be six groups of Strategic

Partnerships: aircraft, warships, armored vehicles,

complex weapons, surveillance, and critical materials.

In order to prevent “conglomerate monopoly,” the

Committee suggests identifying one or two private sector

companies for each of the six Partnerships to limit

competition.

The committee also recommended ending the practice of

single bid rejections.


DHIRENDRA SINGH RECOMMENDS: # STRATEGIC PARTNERSHIP

MODEL

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Strategic is like RUR (Raksha

Udhyog Ratna)

Only one SP should be permitted in

one segment.

Based on the recommendations of

Kelkar Committee



EMPHASIS ON GREATER INDIGENISATION

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Make in India’ should not “become

assemble in India with no IPR [intellectual

property rights] and design control and

thereby perpetuating our dependence on

the foreign suppliers.”

To guard against such a situation, the

experts group has emphasised on

progressively increasing the indigenisation

content

Single window clearances and faster

processes to obtain industrial licences have

also been proposed. HARVEERSIR for GSSCORE


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Industry Friendly Procurement : Streamlining the acquisition process and structure so as to create more opportunities.

It also recommended for Conducive Financial Framework.

Calls for a level playing field for the private sector by way of bank guarantees, payment terms, taxes and duties.


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Thank U


##RAKSHA UDYOG RATNA (RUR) CONCEPT

While making their demand to Kelkar Committee (2004-06) Industry wanted be treated at par with the public sector as regards receipt of imported technology, fulfilment of offset obligations and joint development with Defence Research and Development Organisation.

Govt gave it a go ahead with the concept of RakshaUtpadan Ratnas (RUR)

The Selection Committee of RUR was constituted in May 2006 under Mr PrabirSengupta. Committee gave its recommendations and the report is under review


57

the ‘strategic partnership model’ (SPM) with the Indian private sector for the platforms, weapons, networks and materials is significant.

This will enable private companies to front-end and manage complex defence projects at par with DPSUs.

It calls for a focus on private sector R&D.


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THANK YOU


VK AATRE TASK FORCE 2016

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Related to Strategic Partnership

Dhirendra Singh Committee had also suggested the setting up of a Task Force to “lay down the criteria in details for selection of SPs

VK Aatre Task Force deals with the detailed criteria for selecting Strategic Partners (SPs)


10 SEGMENTS IN TWO GROUPS FROM WHICH

SPS WOULD BE SELECTED

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for Group-I, the Task Force has suggested the selection of only one SP in each segment, whereas the number can go up to two in Group-II segments.


FINANCIAL NORMS

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For Group-I

A consolidated turnover of Rs. 4,000 crore for each of

the previous three years,

Consolidated capital assets of Rs. 2,000 crore in the

last financial year,

Consolidated revenue growth of a minimum of five per

cent in at least three of the previous five years.

For Group-II

consolidated turnover and capital assets are Rs. 500

crore (last 3 Years) and Rs. 100 crore, respectively.


OTHER RECOMMENDATIONS

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technical norms : past performance, engineering and manufacturing capability, R &D culture, infrastructure facilities, HR structure and practices, quality control system etc.

a maximum foreign direct investment (FDI) of 49 per cent.

an independent regulator and a specialised wing in the MoD to deal exclusively with the chosen SPs.


CRITIQUE

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the Task Force has also limited

the participation of SPs to ‘Buy

and Make’ contracts involving

transfer of technology.

the SPs, in the present scheme of

things, are not substitutes for the

inefficient DPSUs and OFs

SOURCE: IDSAHARVEERSIR for GSSCORE

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Slide Intentionally Left

Blank


DPP 2016

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Aim:To ensure timely procurement of

defence (military) equipment, systems, and

platforms required by the armed forces

through optimum utilization of allocated

budgetary resources.

Scope: It will cover all capital acquisitions

undertaken by the Union Ministry of

Defence, Defence Services and Indian

Coast Guard (ICG) both from indigenous

sources and import.


CAPITAL ACQUISITIONS SCHEMES.

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Buy scheme: Outright purchase of equipment and procurements under BUY scheme are

further categorized as Buy (Indian- IDDM), Buy (Indian), and Buy (Global).

IDDM stands for Indigenously Designed Developed and Manufactured.

Buy and Make Scheme: The procurements are categorized as Buy and Make and Buy and Make (Indian).

Make category Scheme: It seeks developing long-term indigenous defence capabilities and procurements.

It empowers Defence Acquisition Council (DAC) to take a fast-track route in order to acquire weapons, which were limited to the armed forces till now.


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Procurement of defence equipment:

Arranged in decreasing order of

priority are categorized as

(i) Buy (India-IDDM). (ii) Buy (Indian). (iii)

Buy and Make (Indian). (iv) Buy and

Make. (v) Buy (Global).

Buy (India-IDDM) seeks to boost

indigenous production.


Upto 90% Government funding for private

Research & Development (R&D) through

Department of Defence Production.

Recognition of the Micro, Small and Medium

Enterprises (MSME) as technology developers.

Offsetting from 300 crores to 2000 crores.

***Offseting push up cost by 16 % for the suppliers. Single BID procurement would now be considered.


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SHQ would be owning and would be responsible

for MAKE projects.

Long term Perspective Plan of 15 Years for

“Make”.

Make-PMU in at all SHQs and Cpast Guard.

Make projects into two Categories: Make-I (Govt

Funded) and Make-II (Industry Funded)

Under Make-I: upto 90% Funding by the govt.

MSMEs first right to undertake prototype of less

than 10 crores.

L-1 T-1 Method for Defence Procurement.


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Thank You


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In 2015, the government issued 56 licenses that

authorized multinational companies such as The

Mahindra Group, The Tata Group, and Pipavav to

set up production units.

The reforms seem to have gained the confidence of

the global defense industry, with $3.5 billion

entering the Indian economy in foreign investments.

In the first half of the 2015-16 , $64 million of

military equipment purchased- a threefold increase

over last year’s $19 million.

100% FDI under approval route.

Source: Albright StonebridgeHARVEERSIR for GSSCORE

Date post:	22-Jan-2018
Category:	Economy & Finance
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Civil aviation n startup

Economy & Finance