Centre reforms 8 sectors, paves way for private sectors in defence, mining — Key policy reforms
Union Minister Nirmala Sitharaman on Saturday (May 16) unveiled the fourth tranche of government's Rs 20 lakh crore economic package to provide relief to various segments of the country battered by the coronavirus lockdown.
In today's press conference, FM Sitharaman announced reforms for eight sectors, namely coal, minerals, defence production, airspace/airport management, aircraft MRO (maintenance-repair-overall), power distribution in union territories, space, and atomic energy.
Nirmala Sitharaman announced to deregulated the coal mining sector, thereby, ending one the last remain great Central monopolies. The minister announced that nearly 50 blocks along with coal-based methane gas reserves will be offered immediately for auction.
The government will also incentivise coal gasification or liquefaction through rebate in the revenue share. It would significantly lower environmental impact and also help India switch to a gas-based economy, she added.
The Rs 50,000 crore infrastructure development will be carried out for it. This will help Coal India (CIL) raise production from 600 million tonnes to 1 billion tonnes by 2023-24.
The Finance Minister announced major reforms in the mining of minerals through a seamless composite exploration-cum-production regime. She said 500 blocks of minerals will be auctioned in a composite exploration-cum-mining-cum-production regime. Also, a joint auction of bauxite and coal blocks would be done to enhance the aluminium industry's competitiveness.
She said the move will help the aluminium industry reduce electricity costs.
Restrictions on Indian air space will be eased to save cost and passengers to spend less time while travelling, FM Sitharaman said today. She also announced that six airports have been identified for immediate bidding to private players. The easing of airspace use would translate to benefits of about Rs 1,000 crore per year for the aviation sector, the minister said.
"As of today, only 60% of India's airspace is free for use. This needs to be increased and optimised. This will not only save cost of fuel, but also save time. This is being done to give civil aviation a boost. This is a sector which has tremendous potential in India," she said.
Also, an additional investment of Rs 13,000 crore would be made by private players in 12 airports auctioned in two previous rounds of bidding, Sitharaman said.
The government announced to give privavte sector a role in India's space programme, including in satellites, launches and space-based services. "Indian private sector will be a co-traveller in India's space activities," Sitharaman said. For boosting private participation in space activities, the government will provide a level playing field for private companies in satellites, launches and space-based services.
Also, the government will provide a predictable policy and regulatory environment to private players, she said while announcing the fourth tranche of the economic stimulus package. The private sector will be allowed to use ISRO facilities and other relevant assets to improve their capacities.
Union Finance Minister Nirmala Sitharaman on Saturday said electricity distribution companies in Union Territories (UTs) will be privatised. A tariff policy that does not burden consumers with distribution companies' inefficiencies will be guaranteed, she said while presenting the fourth tranche of the economic stimulus package. She added that this will lead to a better service to consumers and improvement in operational and financial efficiency in distribution.
In a bid to boost 'Make in India' in defence production, Union Finance Minister Nirmala Sitharaman said that some weapons and platforms will be banned for imports. Items banned for imports can only be purchased from within the country, she said presenting the fourth tranche of the economic stimulus package.
She also announced that the FDI limit in defence manufacturing will be hiked to 74 per cent from 49 per cent.
Sitharaman announced a hike in viability gap funding (VGF) for development of social infrastructure. In her fourth tranche of economic stimulus, she said Rs 8,100 crore will be provided as viability gap funding for development of social infrastructure.
She said social infrastructure projects suffer from poor viability. Therefore, the government will enhance the quantum of viability gap funding up to 30 per cent each of the total project cost as VGF by central and state/statutory bodies.
For other sectors, existing VGF support of 20 per cent each from the government and state/statutory bodies shall continue.
Research reactors will be set up in PPP formats for the production of medical isotopes to promote affordable treatment for cancer and other diseases. The Centre will also establish facilities in PPP mode to use irradiation of technology for food preservation.
Finance Minister Nirmala Sitharaman told media persons that India's start-up ecosystem will be linked with to nuclear sector and technology development cum incubation centres will be set up for fostering synergy between research facilities and tech-entrepreneurs.