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TRANSPORT

CIVIL AVIATION

8.194 In a country of the size of India where major industrial and commercial centres are far apart and transport services must contend with a variety of terrain and climatic conditions, air transport has a significant role to play. It offers savings in time that cannot be matched by surface transport over long distances. Air transport helps optimise technological, managerial and administrative skills in a resource scarce economy.

8.195 There are a number of agencies which are involved in providing civil aviation services in the country. While Air India, Indian Airlines and Vayudoot provide air services, International Airports Authority of India (IAAI) and Directorate General of Civil Aviation (DGCA) provide infrastructural facilities. International Airports Authority of India looks after the development of four international airports, which handle nearly 40 per cent of domestic flights and most of the international air services. Directorate General of Civil Aviation is responsible for maintenance and development of 87 civil aerodromes, 23 civil enclaves, and 92 aeronautical communication stations

8.196 Air India operates its services with 10 Boeing 747, 5 Boeing 707 and 3 Airbus aircraft. Indian Airlines has a fleet strength of 25 Boeing 737, 10 Airbus and 19 Turbo-prop aircraft.

DOMESTIC AIRLINES

Review

8.197 There has been a phenomenal increase in the volume of air traffic in the last over two decades. Thus 8.51 million passengers travelled by air in 1984-85 as against only 0.79 million in 1960-61. However, the share of domestic air traffic in the total passenger traffic by all transport modes remains as low as 1.0 per cent. Table 8.14 indicates the growth in capacity, traffic carried and the load factor achieved by Indian Airlines.

TABLE 8.14 : Capacity and Traffic—Indian Airlines

*The capacity referred to is the generated capacity and not rated capacity.

8.198 During the last 25 years domestic air traffic has registered an average annual growth of 10 per cent. Airline load factor has generally varied between 68 to 78 per cent. The capacity generated has been lowej- than the rated capacity, and has varied between 88 and 94 per cent of it. Aircraft utilisation in terms of number of hours flown per aircraft day has ranged between 7 and 8 hours depending upon the type of aircraft used.

Seventh Plan

8.199 In the Seventh Plan, the following considerations would be kept in view for the purpose of investment planning:

(i) Civil aviation has been growing at a more rapid pace than any other mode of transport. The domestic traffic has registered an average increase of 10 per cent and by all indications, this trend is likely to continue, unless otherwise restrained. This trend growth rate, considering the larger base, would require a substantial additional capacity. Replacement of ageing aircraft would further add to the required acquisition of aircraft. All this would create heavy demand on financial resources, and, in the years to come, the airlines may have to be given heavy budgetary support. Besides, there would be pressure on scarce foreign exchange resources particularly, when the domestic airlines are not able to generate enough foreign exchange for the purchase of aircraft, spare parts and fuel. Even at present, foreign exchange expenditure of airlines exceeds their foreign exchange earnings. The growth of traffic will thus need to be about 8 per cent per annum. This will involve rationalisation of air services and of tariff structure, confining services to routes where air transport has a distinct edge. Similar steps would be needed in the case of Vayudoot services as well. Moreover, because of limited traffic on Vayudoot routes there is extremely poor utilisation of costly ground investments.

(ii) Some of the tourist routes served by domestic services are showing heavy losses, which only reveals the weakness of tourist promotion and development programmes. Provision and expansion of airline services should invariably form a part of the total package of development of a place of tourist interest.

(iii) Air transport is very heavy on fuel consumption as compared to other modes of transport. Fuel consumption per traffic unit varies inversely with the length of the haul. Indiscriminate expansion of air services has resulted in increasing short haul operations, which have further raised fuel consumption per available seat kilometre. Coupled with poor occupancy factor on these routes, fuel consumption per revenue passenger kilometre has increased even further. This situation needs to be avoided.

(iv) Vayudoot services should be integrated with the services of Indian Airlines and be operated as feeders to the nodal service centres of Indian Airlines. Vayudoot should pay special attention to the provision of air services in the North-East region.

INTERNATIONAL AIRLINES

Review

8.200 Air India carried 1.84 million passengers in 1983-84. Passenger traffic constitutes two-thirds of the total traffic, the remaining one-third being the share of the freight traffic. The bulk of passenger traffic constitutes those who travel to and from India. The share of Air India in this type of traffic has varied between 32 to 45 per cent as against the desirable 50 per cent norm. Table 8.15 indicates the capacity growth, traffic carried and load factors since 1960-61.

TABLE 8.15 : Capacity and Traffic—Air India
(in million)

8.201 Air India traffic registered an average annual growth of 12.4 per cent during the period 1960-85. In the Sixth Plan the rate of growth was 8.9 per cent although in 1984-85 it remained as low as 1.1 per cent only.

Seventh Plan

8.202 In the Seventh Plan Air India is expected to achieve a growth rate of around 4 per cent per annum. This forecast takes into account recent un-favourable trends. The high growth rate in 1970s was due to boom in Indo-Gulf operations, but the traffic has since levelled off. However, the cargo traffic has been increasing at a rapid rate. There is a need to augment cargo carrying capacity of Air India to meet the growing demand for air cargo space for country's export and import shipment.

Infrastructure facilities

8.203 While Indian Airlines and Air India have grown at a rapid rate, infrastructure facilities have not kept pace with their development programme. With the geographical location of India and night curfew imposed by some countries, traffic originating from and outside India usually passes through international airports at night, thus creating serious congestion between 10.00 p.m. and 6.00 a.m. and gross under-utilisation during the rest of the day. The congestion problem is acute in Delhi and Bombay airports which handle 80 per cent of international traffic.

8.204 Since its inception, IAAI has taken up a number of schemes aimed at creating additional capacities. With the completion of these schemes, the situation would considerably ease, although the additional capacity is expected to be fully used up before long as the air traffic grows in future. In the Seventh Plan, the following measures would be taken to enhance the capacity of international airports:

1. Increase in throughput with the aid of operational and tariff measures designed to even out traffic peaks to the extent possible. The provision of centralised check in system by IAAI through computer terminals linked with scheduled airlines would facilitate reduction in check in time. In turn, this would result in optimum utilisation of terminal service area capacity.
2. Integration of various functional services to improve productivity and service efficiency.
3. Streamlining of facilitation procedures at airports so that formalities are reduced and the time taken to accomplish them is minimal.
4. Development of selected domestic airports to serve as satellites relieving pressures on the existing international airports.

8.205 A National Airports Authority would be set up for the management of the domestic airports. It would provide greater flexibility in planning and speedy implementation of development schemes and rationalised airport operations. Upgradation of existing airports would have priority over the construction of new ones.

8.206 There is need to improve further the productivity of both internal and international services. In the case of Indian Airlines, present utilisation levels of Boeing 737 and Airbus aircraft do not compare favourably with those actually achieved in the past. Similarly, the utilisation level of airbus aircraft of Air India is lower than that of other inter-national carriers. Measures to improve productivity would include among others, extension of operational hours and consequent rescheduling of services. A developing country facing resource constraint can ill-afford the luxury of highly convenient schedules for its users. The down time of aircraft needs be kept to the minimum by improvement in maintenance. Night landing facilities would be provided and the turn round time reduced at the airports.

8.207 It is also necessary for the airlines to raise their load factor by deploying the fleet on high traffic density routes. Both Indian Airlines and Air India would undertake vigorous sales promotion, and strengthen their computer and communication facilities to achieve reasonable levels of load factor on their services.

8.208 It is necessary also to bring about better coordination and integration of operations of the two airlines so as to achieve better utilisation of the system capacity as a whole.

8.209 The Civil Aviation Sector is not generating enough resources at present for its development and is also being subsidised by the national exchequer. Civil Aviation operations should normally generate adequate operating surplus to meet current costs, replacement requirements and acquisition of new assets. To this end the following measures would need to be initiated by the constituent units of the Civil Aviation Sector:

1. restructuring of the route network—at present only one third of services provided by Indian Airlines are generating an operating surplus.
2. rationalisation of fare structure, particularly on short haul routes to make it cost oriented through adjustment of the base and the taper; and
3. upward revision of charges by DGCA and IAAI for the services provided by them.

8.210 Civil Aviation is a growing field in which new types of aircraft with progressively high level of technological sophistication are introduced. While heavy investments have been made on the procurement of the latest aircraft and ground equipment, there has not been corresponding investment in manpower development. In the Seventh Plan, emphasis would be placed on the upgrada-tion of training facilities for all levels.

8.211 In India helicopters are used mainly for aerial spraying, exploration of oil and general purpose. Helicopters are owned by a number of Central and State Government agenices and private non-scheduled operators. A large number of helicopters are unserviceable or in disuse because of lack of maintenance facilities. Oil and Natural Gas Commission (ONGC) has also been taking on lease helicopters, mostly from foreign operators, to meet air support requirements for their operation.

8.212 Considering the requirements of helicopters by ONGC for air transport support for their operations and requirement of helicopter services inaccessible areas to which the operation of conventional air service would not be possible, there is a need to set up a separate organisation for running helicopter services which would at the same time provide means of handling natural calamities and other emergencies. This should lead also to proper maintenance of the helicopter fleet.

Programme for Seventh Plan

8.213 The programme for Air India would include induction of nine twin-engined aircraft, augmentation of capacity for freight traffic, strengthening of work-shop and training facilities, up-grading of computer network and provision of matching ground services at airports. In regard to Indian Airlines, the programme would include acquisition of aircraft, completion and commissioning of jet engine overhaul facilities at Delhi, modernisation of workshop facilities, construction of hangars and provision of ground facilities at the airports. The programme of International Airports Authority of India would include completion of international terminal phase II at Bombay; international terminal phase I at Delhi and Madras domestic terminal complex. In case of DGCA, emphasis would be on installation of flight safety equipments such as air route surveillance radar etc.

Outlays

8.214 In the Sixth Plan, an outlay of Rs. 859.10 crores was provided for the Civjl Avitation sector. The expenditure, however, was Rs. 931.03 cores. Annexure 8.5 summarises the requirement of funds for the various sub-sectors of Civil Aviation in the Seventh Plan. Due to resource constraints, an amount of Rs. 730.21 crores has been provided which would suffice to meet the expenditure on ongoing schemes and a few new starts. The position, however, would be reviewed at the time of Annual Plan allocations having regard to the ability of the sector to mobilise resources. While sanctioning programmes, priority would, however, be accorded to the de-velopement of support infrastructure over acquisition of assets. In the State Sector, Civil Aviation activities include flying clubs and development of air strips, for which an amount of Rs. 27.63 crores has been provided.

PIPELINES

8.215 Pipelines are the most convenient and suitable mode of transport for the movement of petroleum products and gases in bulk over long distances. In recent years, other commodities likes coal, which can be converted into slurry, are also being carried by the pipelines. With the steady increase in the demand of petroleum products and natural gas and the feasibility of converting solids into slurry form, the pipelines have become a significant alternative mode of transport and can supplement surface modes of transport working under capacity constraints.

Review

8.216 In India, pipelines both on and off-shore, have been primarily used for transportation of crude oil, natural gas and petroleum products. At the beginning of the Sixth Plan, the pipelines network comprised 5035 kms. This length increased by 450 kms. of product, 856 kms. of crude and 169 kms. of gas pipelines during the Sixth Plan period thereby raising the total to 6535 kms.

8.217 In so far as solids are concerned, iron ore is moved in slurry form from Kudremukh to Managalore port and rock phosphate concentrate is piped from Maton Mine to Debari-Smelter plant in Udaipur area.

8.218 Pipeline transportation is characterised by comparatively low operating and maintenance costs, ability to traverse difficult terrian and low energy consumption. This mode of transportation would, therefore, be encouraged wherever it has comparative cost advantage for specified streams of traffic and where it can relieve pressure on other transport modes particularly Railways without unduly under-mining the utilization of potential rail capacity.

8.219 In the Seventh Plan, experimental pipeline transportation of coal from pit-head to a thermal power station would be taken up to establish the economic and operational feasibility of moving coal in slurry form. In respect of oil and gas pipelines, work on ongoing projects would be continued. Bombay-Pune product pipeline is likely to be commissioned early in the Seventh Plan. In so far as gas transportation is concerned, a major project connecting Hazira-Bareilly-Jagdishpur over a length of 1700 kms, with a gas throughput of 18.2 million cubic metre per day initially is likely to be completed within the Plan period. The provision for the schemes of pipelines has been shown in Power and Energy sector.

TOURISM

8.220 Tourism is now recognised as an activity generating a number of social and economic benefits. It promotes national integration and international understanding, creates employment opportunities and augments foreign exchange earnings. Tourism also gives support to local handicrafts and cultural activities. Expenditure by tourists has a multiplier effect and also generates considerable tax revenue. All these benefits are achieved with a relatively low level of investment.

8.221 Over the years tourism has emerged as an important element of current foreign exchange earnings comparable to some of the major merchandise exports. Foreign exchange earnings from tourism which amounted to about Rs. 32 crores in 1971-72 have been increasing from year to year and in 1982-83 these amounted to about Rs. 1031 crores. Since import of goods needed for tourism is quite limited, the tourist earnings have a relatively large value added component. Tourism is an expanding industry all over the world and the potential for tourist earnings in India is very high.

8.222 Domestic tourism plays a very big role in the national objective of promoting social and cultural cohesion and national integration. Its contribution to generation of employment is also very high. The seasonal pattern of domestic tourism differs from that of foreign tourism. However, use of expensive international class hotels and other facilities by domestic tourists should be discouraged by appropriate means to economise on scarce resources.

Review

8.223 International tourism in India has grown substantially over the last three decades. The number of foreign tourist arrivals, (excluding Pakistan and Bangladesh) increased from 16,823 in 1951 to 884,731 in 1983. Of course, the annual growth rate has been erratic due to a number of factors. During the decade 1961 to 1970, the average rate of growth was about 8.4 per cent per annum. In the decade 1971-80, India experienced an annual growth of about 12 per cent per annum. From 1979 onwards the overall rate of growth declined considerably. This was mainly on account of steep rise in the cost of air travel. There were also recessionary conditions in the major tourist generating markets of West Europe and North America which account for about 50 per cent of the total tourist traffic coming to India. However, the world tourism is once again buoyant and India has good prospects of achieving an accelerated growth rate of tourism in the coming years if appropriate marketing strategies and measures to remove the main constraints and irritants for the tourists visiting India are adopted. India's share in the world tourist market is at present only 0.3 per cent and can be increased significantly through concerted efforts.

8.224 For the Seventh Plan period, the aim is to achieve an annual growth rate of 7 per cent in the tourist arrivals. It would be possible to achieve this target, given the desired improvements in the infrastructure and a certain degree of relaxation in the policies and procedures, regarding the admittance of foreign toruists into the country.

8.225 The main objectives for the tourism sector in the Seventh Plan would be (i) faster development of tourism; (ii) according the status of an industry to tourism; (iii) re-defining of the role of public and private sectors to ensure that the private sector investment is encouraged in developing tourism and the public sector investment is focussed mainly on development of support infrastructure; and (iv) exploiting tourism potential to support local handicrafts and other creative arts and to promote national integration.

8.226 The main thrust areas for development of tourism in the Seventh Plan would, among others be as follows:—

1. Development of selected tourist circuits-centres which are popular with the tourists instead of spreading limited resources thin over a large number of circuits-centres.
2. Diversification of tourism to India from the traditional sight-seeing tour centred primarily on places of cultural tourism interest, towards the more rapidly growing holiday tourism market within the framework of country's milieu with a conscious attention to the aesthetic, environmental and socio-cultural implications of tourism projects.
3. Development of non-traditional areas such as (a) trekking, (b) winter sports, (c) wildlife tourism and (d) beach resort tourism to exploit the tourism resource of the Himalayas, the vast coastline with sandy beaches and abundant sunshine, and wild life to attract more tourists and to lengthen their period of stay in the country.
4. Restoration and balanced development of national heritage projects of both cultural-historical and tourist importance to exploit advantages of India's unique place as a cultural tourism destination and to utilise tourism as a major force in support of conservation of national heritage.
5. Exploration of new tourist generating markets particularly in the Middle-East, South-East and East Asian countries who have a broad spectrum of cultural affinity with India; encouragement of ethnic tourism by launching a programme of 'Discover your Roots'; and vigorous marketing of conference and convention traffic.
6. Launching of a 'National Image Building and Marketing Plan' in key markets by pooling resources of the various public and private agencies instead of independent and disjointed efforts presently undertaken by these organisations to project a better image of the country which would yield abundant fall out for tourism growth and also be of advantage in trade and commerce.
7. Provision of inexpensive but clean accommodation at different places of tourist interest.
8. Consolidation of operations rather than expansion and improvement in the service efficiency of public sector corporations in the tourism sector.
9. Streamlining of facilitation procedures for passengers at the airports so that formalities and time taken to complete them is minimal.

8.227 The broad division of responsibility between Central and State Governments would continue to be on the basis that by and large schemes intended primarily for international tourism would be in the Central sector and those meant mainly for promotion of domestic tourism in the State sector. However, the Central Department of Tourism which oversees overall development of tourism in the country, would need to play an increasingly greater role in promoting domestic tourism. The Department is already providing financial assistance for construction of yatrikas for pilgrim tourists, for which a Registered Society viz. Bhartiya Yatri Avas Vikas Samiti, has been set up. The area of such activities would need to be expanded to provide assistance for construction of low priced and inexpensive accommodation for low and middle class domestic tourists at different places of tourist interest. The India Tourism Development Corporation would continue to provide technical assistance to State Governments for promotion of domestic tourism. Private Sector would be encouraged to play a greater role in provision of tourist accommodation at different places of tourist interest.

8.228 Against the provision of Rs. 187.46 crores for tourism in the Sixth Plan, an outlay of Rs. 326.16 crores has been provided in the Seventh Plan 1985-90 which includes Rs. 138.68 crores in the Central Sector and Rs. 187.48 crores in the State Sector. In addition, quite large investments are expected to be made for tourism by the private sector. Although the strategy in the Seventh Plan would be to diversify foreign tourism to India to other primary sources of interest, due attention would be given to meet the requirements of cultural tourism. Master plans have already been prepared for development of tourist complexes/facilities at four centres including Fatehpur Sikri, Kushinagar, Brajbhoomi and Sravasti which have been designated as national heritage projects. In the Seventh Plan, 10 additional cultural tourism master plans would be prepared on national heritage projects. High priority would be given to development of requisite facilities at the more important centres such as Mathura, Ajmer, Varanasi, Rajgir, Brajbhoomi. The environment and natural setting of such places would need to be preserved.

8.229 Sustained efforts would be made for development of Buddhist pilgrimage tourism for which there is a great potential. The programme for the Seventh Plan includes integrated development of major Buddhist Pilgrimage centres, provision of suitable accommodation, landscaped meditation parks and pavilions, etc.

8.230 There is also considerable potential for increasing wildlife tourism to India. The number of national parks and wildlife sanctuaries in India has now gone up to 47 and 211 respectively. Of the national parks, over 15 are reserved under Project Tiger. The Seventh Plan includes augmentation of accommodation and other facilities at the national parks and wildlife sanctuaries.

8.231 Adventure tourism, trekking in particular holds out great potential in terms of numbers. It would be necessary to bring together the main Hill States as well as the airlines, Indian Mountaineering Foundation and the Youth Hostel Asssociation of India for formulation of coordinated programme of promotion of trekking. In the Seventh Plan a number of measures would be taken up including wide publicity abroad, establishment of equipment hire shops, construction of alpine huts on selected routes, training of guides, setting up of mountain communication network system, rescue patrols and launching "Keep the mountains clean" campaigns. Efforts would also be made to promote water sports, and other sports/adventure activities in the Seventh Plan.

8.232 Under social tourism yatrikas are constructed for pilgrimage tourists by the Bharatiya Yatri Avas Vikas Samiti a registered society, set up by the Department of Tourism. Yatrikas have already been set up at Chitrakoot, Amarkantak, Brindaban, Kampil and Bidar. Work is in progress on additional yatrika projects at Karaikal (Pon-dicherry), Puri (Orissa) and Nainadevi. In the Seventh Plan a number of new yatrikas/dharamshalas/musatirkhanas would be constructed at different religious places by the Samiti through Central grants and local donations. A new scheme would also be taken up by the Department of Tourism for setting up of inexpensive accommodation i.e. Yatri Niwases at important places of tourist interest to meet the requirements of middle income tourists both international and domestic. In this joint venture scheme, the State Governments would be collaborating.

8.233 For overseas publicity and marketing, considerable step up in the outlay has been made in the Seventh Plan as compared with earlier Plans. Aggressive marketing would be taken up in the existing tourist generating markets abroad as well as to explore new markets. It would necessary to re-orient the marketing projects and rationalise the locations of the tourist offices abroad keeping in view the market conditions and potential. In order to cater to the need of the professionally trained manpower for tourist management, Indian Institute of Tourism and Travel Management would be developed as a model institute.

8.234 The main emphasis of ITDC in the Seventh Plan would be on consolidation rather than expansion. The number of rooms in the hotels owned/managed by the ITDC was 2701 in 1979-80 and it increased to 4030 at the end of the Sixth Plan. Sustained efforts would be made by the ITDC to improve profitability of its existing hotels through different measures including improvement in the occupancy ratio. Under the joint venture arrangements with the State Governments/State Tourism Development Corporations, the ITDC would construct hotel rooms of 3 star category in different States by forming new companies.

8.235 Another public sector undertaking which is also engaged in the construction of hotels is the Hotel Corporation of India (HCI) which is a subsidiary of Air India. There is an urgent need for effective coordination between the plans, programme and operation of HCI and the ITDC.

8.236 As regards hotel management and catering technology at the end of the Sixth Plan the country will have 25 institutes for training of manpower for hotel and catering technology. This includes 11 diploma level institutes and 14 craft level institutes. These institutes are able to train 900 students at the diploma level and 2650 students at the craft level per annum. The programme for the Seventh Plan envisages upgradation of 5 foodcraft institutes to diploma level and setting up of 10 new foodcraft institutes. The existing institutes will also be expanded depending upon the requirements.

8.237 Private sector would be encouraged to provide hotel accommodation at different places of tourist interest to meet the expected growth of traffic. There are at present 425 approved hotels in the public and private sectors with room availability of 30,799. In addition, 216 hotels are under construction. With their completion, the availability of hotel rooms would increase to 43,663. The growth of hotel accommodation in the country has been lopsided in so far as there are too many hotels concentrated in the metropolitan areas. Moreover, about 50 per cent of these hotels are in the 5-star category and there is great shortage of hotel accommodation of 1-3 star category which is patronised by quite a large number of tourists. It is necessary to rectify the situation and thrust in the Seventh Plan would be to develop low priced, inexpensive but clean accommodation at places of tourist interest which are already experiencing shortage of such accommodation. Private Sector would be encouraged to play greater role in provision of such inexpensive accommodation also. In the Seventh Plan, about 15,000 additional rooms may need to be built to meet the anticipated growth of traffic which will be provided in private sector hotels as well as in youth hostels, yatri niwases and yatrikas to be constructed by the Central and State Governments.

8.238 With tourism being treated as an industry in the Seventh Plan, right climate and environment would be created for its rapid growth and it would be in a position to generate adequate internal resources for development. This may also contribute in reducing the cost of hotel projects which can then offer more competitive and attractive tariffs to the tourists. These measures would help in accelerating the rate of growth of tourism in the country.

8.239 Tourism is a service industry and the country has acquired adequate expertise to undertake consultancy and management assignments for hotels abroad. This would be encouraged.

OUTLAYS IN THE TRANSPORT and TOURISM SECTOR

8.240 The sub-sector wise break-up of the outlays for the Seventh Plan in the Transport and Tourism Sector is indicated in Annexure 8.6.

Annexure 8.1: Break-up of Central Sector Road Oul
(Rs. in crores)

ANNEXURE—8.2 : Seventh Plan Outlays under Road Transport (Centre)
(Rs. in crores)

ANNEXURE—8.3:  Seventh Plan Outlay—Ports and lighthouses (Centre)
(Rs. in ccores)

ANNEXURE—8.4 : Seventh Plan Outlay—Inland Water Transport
(Rs. in crores)

ANNEXURE—8.5 :  Requirement of Funds for Civil Aviation during the Seventh Five Plan (Central Sector)
(Rs. in crores)

* Includes equity contribution of Rs. 42 lakhs to Hotel Corporation of India and Rs. 12.50 crores to Vayudoot.
** Includes equity contribution of Rs. 12.50 crores to Vayudoot.
** Total requirements of Vayudoot is estimated at Rs. 32.21 crores. A sum of Rs. 12.50 crores each

is included in the outlay of Air India and Indian Airlines for Vayudoot. Oil and Natural Gas Commission (ONGC) would provide equity contribution to Helicopter Corporation of India.

ANNEXURE—8.6 : Seventh Plan Outlay on Transport and Tourism
(Rs. in crores)