|Helping India take off|
|Thursday, 12 April 2012 01:04|
NCAER says economic impact of Delhi airport is 0.45% of GDP
If Delhi’s chief minister Sheila Dikshit is found talking about infrastructure most of the time, as opposed to other politicians who spend more time on caste and poverty, NCAER’s just-released Economic Impact Study of the Delhi Airport puts this in perspective. According to the report, which was sponsored by the Delhi International Airport Limited (DIAL), Delhi’s airport operations contributed 13.53% to Delhi’s gross state domestic product (GSDP) and this is projected to rise to 22.2% by 2020—for the country as a whole, the 2009-10 impact is reckoned at 0.45%, going up to 0.7% in 2020. The numbers need to be interpreted with some caution as, apart from the questions that invariably arise with respect to methodology and the assumed input-output multipliers, the study itself talks of a ‘direct and indirect’ impact as well as an ‘induced impact’, the latter relating to someone deciding to set up, say, a convention centre in Delhi because of the great connectivity provided by the airport. In the case of Delhi, 8.01 percentage points of the 13.53% impact on the economy is based on the ‘induced impact’. Whether the new convention centre was set up because of the airport or because of some other reason like higher economic growth is a judgement call.
The larger point of the impact, even though you can quibble over the numbers, is however beyond dispute—a host of global studies on the impact of different airports on the local economies have been presented and they show significant levels of impact, as is only to be expected given how vital well-run airports are for tourism and commerce. DIAL, for instance, provides for 64,000 direct jobs, 35,000 persons were employed at its site during the construction phase.
Given the airport’s importance to the economy, it is most unfortunate that, as DIAL officials were at pains to point out on Tuesday, if nothing was done about the mounting dues, the airport may even have to shut operations. While the airport regulator does not buy DIAL’s arguments for a 774% hike in tariffs—it has approved a 334% hike—the fact that the last fare hike was a little over a decade ago is surely worrying. Similarly, the fact that airlines like Kingfisher and Air India have managed to get away with accumulated dues of R525 crore is a sad reflection on both the way the aviation authorities have allowed things to run in the sector as well as the fact that DIAL was content to play along instead of looking at its commercial interests. The threat of the airport shutting down is a wake up call for all concerned.