The User Development Fee (UDF) in Indian Airports - Legal and Regulatory Issues

Privatization of airports in India has eliminated the monopoly of the state-owned Airport Authority of India (AAI). Originally, privatization was intended to attract private capital and thereby improve airport standards, which in turn would reduce the high airport costs that prevailed in India. Privatization has brought in a sea change in the economic context, especially in terms of airport charges. This paper attempts to analyze a new category of airport levy, the User Development Fee (UDF). Various legal and regulatory issues connected with the UDF are discussed with respect to national laws, as well as international conventions and guidelines. The author is of the opinion that, on many counts, the UDF is not in line with international guidelines, the Indian constitution, or Indian statutes. The goal of privatization - to bring in private capital for developing airport infrastructure - has given way to the levying of a tax from the traveling public to finance the private capital. If not corrected in time, the current model of privatization may result in higher airport charges and, in turn, harm the growth of civil aviation.


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  • Accession Number: 01528418
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jun 19 2014 9:57AM