After almost 15 years since the idea was raised, India will create a new aviation regulatory body to oversee the troubled airline sector, monitor aviation safety issues and take steps to modernize more airports and air traffic management services

The proposed Civil Aviation Authority (CAA), which will replace “with full operational and financial autonomy” the Directorate General of Civil Aviation (DGCA) that currently oversees all aviation regulatory matters in India, is expected to be introduced during the current session of parliament, Civil Aviation Minister Ajit Singh says.

“We are preparing a Cabinet note on creating the CAA. A draft of the proposal has been sent to the law ministry. We are hoping to table the bill in the second half of this session,” he adds.

Aviation experts have long insisted that the DGCA is unsuitable and inadequate for its responsibilities, which have increased significantly in the past 25 years.

A report prepared by Committee on Aviation Safety in 1997 recommended that the DGCA should be converted into a fully autonomous CAA to strictly enforce safety and security regulations and strengthen the airline industry, which was reeling under mounting operational and financial issues; however, the idea was kept in abeyance.

“The CAA will take over the responsibilities of the DGCA in areas like air safety, airspace regulation, setting aviation standards, licensing of airlines, pilots, air traffic controllers and consumer protection,” Singh says.

The CAA, estimated to cost about $205 million to establish, will be headed by a chairperson and supported by a director general and at least nine other members–all appointed by the federal government

“It [CAA] will have authority to call for information, including financial and others, conduct investigations, power to issue directions of seizure, punish operator, company or a government department, if they fail to comply with its orders,” Singh says.

India’s airline industry has swelled rapidly in recent years, as passenger air traffic went up from 7.3 million during 2005-06 to 16.2 million during 2011-12. Aircraft movement has also almost doubled from nearly 8 lakh to 15 lakh during the period.

But the strength of the DGCA, which currently regulates all aviation safety-related activities has  gone up only in “a minuscule manner,” Singh says.

“There has been a lot of criticism of DGCA. Partly, the problem is there is a lengthy, cumbersome recruitment process and secondly there is limited delegation of financial powers,” he adds.

Keeping this in view, the CAA will have complete financial autonomy and a separate fund, called the Civil Aviation Authority of India Fund, to finance its expenses including payment of salaries. In addition, the fund will receive federal budgetary assistance.

Aviation experts, however did not seem impressed with the aviation ministry’s latest proposal.

Dhiraj Mathur, executive director and head of the aerospace and defense practice at PricewaterhouseCoopers, referred to it as “old wine in new bottles.”