The civil aviation sector could be out of the ambit of the Competition Commission of India, once the proposed Civil Aviation Authority (CAA), an independent regulatory authority for the sector, is put in place.
The CAA would have the final authority and powers on economic regulations and consumer protection, legal experts have said. This could mean that the anti-trust body would have limited powers to monitor the sector and protect consumer interests.
“It cannot happen automatically unless the separate jurisdictions are carved out,” Ashok Chawla, chairperson, CCI told Hindustan Times. “Tariffs for any service are fixed by independent regulators even now.”
Legal experts say that though the proposal to set up the CAA is at a formative stage, it depends on the kind of teeth that the regulator is given.
“Vesting consumer related issues with CAA would go against the spirit and intent behind the formation of the CCI,” Manoj Kumar, legal expert and managing partner, Hammurabi and Solomon.
“Any exemption from the provisions of the Competition Act needs to be done only by the corporate affairs ministry. Different administrative ministries or departments of the Centre should not be allowed to exempt themselves from the applicability of the Competition Act or from the supervision of the CCI," Kumar said.
Civil aviation minister Ajit Singh had informed Rajya Sabha that the proposed CAA would have financial and administrative flexibility to meet functional requirements of an effective safety oversight system.
The CAA has been mooted to overcome the constraints faced by regulator DGCA (directorate general of civil aviation) in terms of recruitment and retention of technical manpower and inability to quickly address ongoing operational issues due to lack of adequate administrative and financial authority.
The banking industry, which comes under the jurisdiction of the Reserve Bank of India, is already out of the CCI ambit. There have been reports indicating that even the telecom industry, which is governed by Telecom Regulatory Authority of India, could be moved out of the CCI radar.