Fourth tranche of Rs. 20 lakh crore economic package emphasizes on structural reforms, coal & aviation sector
NEW DELHI: On Saturday, the Union Finance Minister Nirmala Sitharaman addressed her fourth press conference to unveil the next tranche of funds as part of India’s Rs 20 lakh crore economic package to help the country become self-reliant. The Finance Minister had announced three tranches of measures to mitigate the impact of lockdown due to coronavirus pandemic on the economy.
On Wednesday, relief measures for micro, small and medium enterprises were focussed on. On Thursday, measures for migrants, farmers and street vendors were announced while yesterday the funds were allocated to agriculture and allied activities.
Today, the Finance Minister announced measures that emphasized on the structural reforms to build an Atmanirbhar Bharat. The fourth tranche mainly focussed on eight sectors, including coal, minerals, defence production, airspace management/ airports/ MRO, power distribution companies in UTs, the space sector and atomic energy.
“The structural reforms being announced today will impact those sectors which are new horizons of growth, unleashing new investment, boosting production and creating jobs,” Finance Minister Nirmala Sitharaman said.
The government aims to reform policies to fast-track investments in the country. A scheme will be implemented in all states through ‘challenge mode’ for industrial cluster upgradation of common infrastructure facilities and connectivity.
Stating a need to reduce import of substitutable coal and increase self-reliance in coal production the FM introduced the private sector participation to increase competition & transparency through a revenue sharing mechanism instead of a regime of fixed rupee/tonne. This implies that any party can bid for a coal block and sell in the open market now.
After introducing policy reforms in the coal sector, the Centre announced sectoral reforms in mining of minerals too. The government is set to introduce a seamless composite exploration-cum- mining-production regime.
“This will boost growth, employment and bring state-of-the-art technology especially in exploration,” says Nirmala Sitharaman.
Meanwhile, the FM also said that the government will notify a list of weapons & platforms for ban on import with year-wise timelines, and will also ensure indigenisation of imported spares. For this, a separate budget will be given for domestic capital procurement. This will also reduce the huge defence import bill.
She also announced that the FDI limit in defence manufacturing under automatic route will be raised from 49% to 74%. The government will also begin time-bound defence procurement and faster decision making by setting up a Project Management Unit (PMU) to support contract management.
FM Sitharaman said that restrictions on utilisation of Indian air space will be eased so that civilian flying becomes more efficient, helping bring in about Rs 1000 crore a year for the aviation sector. This will also reduce fuel use and time, leading to a positive environmental impact. Meanwhile, six more airports will be available for auction under a PPE model increasing annual revenue for the Air Authority of India. The maintenance, repair and overhaul of aircrafts will be carried out in the country itself which was earlier done abroad.
The government will release a tariff policy with reforms, including consumer rights, promotion of industry and sustainability of sectors.
The FM announced that the government is boosting participation of the private sectors in space activities by providing a level-playing field for private companies in satellites, launches and space-based services. Private sector will be allowed to use ISRO facilities and other relevant assets to improve their capabilities. Future projects for planetary exploration and outer space travel etc. to be open to the private players.
The government says it will boost private sector investments in social-infrastructure projects as well, like hospitals, by revamping the Viability Gap Funding Scheme. The total outlay for this has been pegged at Rs 8,100 crore.
Through reforms for the atomic energy sector, the government aims to establish a research reactor in PPE basis for production of medical isotopes to promote welfare of humanity through affordable treatment for cancer and other diseases. The government will also establish facilities to use irradiation technology for food preservation, again in PPE mode. This technology will compliment agricultural reforms and assist farmers. The government will lastly link India’s robust start-up ecosystem to the nuclear sector to foster a synergy between research facilities and tech- entrepreneurs.