Union Finance Minister Nirmala Sitharaman on Saturday, 16 May, addressed a press conference on the 20 lakh crore economic package announced under the ‘Atmanirbhar Bharat Abhiyan’, saying that fourth tranche of the package would focus on structural reforms in eight specific sectors.
The announcements will focus on structural reforms in new sectors, where growth is possible and employment is generated, the FM said, adding that many sectors need policy simplification and that once a sector is decongested it can be boosted for growth and jobs.
Sitharaman also specified the eight sectors where structural reforms would be announced on Saturday – coal, minerals, defence production, air space management and airports, MRO, distribution companies in union territories, space sector, and atomic energy.
Sitharaman has been detailing measures under the Rs 20 lakh crore package announced by Prime Minister Narendra Modi, to mitigate the damage done by the coronavirus-induced lockdown since 25 March.
1. Coal Sector
Speaking about the coal sector, Sitharaman announced that the government would now be allowing commercial mining of coal on a revenue sharing basis, doing away with the government’s monopoly on coal mining in the country. She also said that Rs 50,000 crores would be spent by the government of India for the purpose of building coal evacuation infrastructure.
“The government will introduce competition, transparency, and private sector participation in the coal sector through revenue sharing mechanism instead of the regime of fixed rupee/tonne,” Sitharaman said.
50 new coal blocks for commercial mining will be offered immediately.
2. Minerals Sector
Speaking about the minerals sector, Sitharaman said that the government would be enhancing private investments and introducing a seamless composite exploration-cum-mining-cum-production regime.
She said that there would be joint auction of minerals to enhance competitiveness. 500 mining blocks will be offered through an open and transparent auction process and a joint auction of bauxite and coal mineral blocks will be introduced to enhance the aluminium industry's competitiveness.
Sitharaman also announced the rationalisation of stamp duty payable at the time of the award of mining lease.
3. Defence Production
Sitharaman stressed that India needs to be self-reliant in areas where the country can be, such as defence production. She also said that there would be a list of weapons/platforms whose import would be banned and would henceforth only be obtained from India. The list of the same notified can only be purchased from India, the FM said, adding that there would also be indigenisation of imported spares.
This would also allow the import bill would be reduced and that specified weapons would only be bought from Indian producers who meet the standards of the Indian Armed Forces.
With respect to the sector, FM Sitharaman also said that Foreign Direct Investment (FDI) limit in defence manufacturing under automatic route is being raised from 49 percent to 74 percent.
To improve efficiency of supplies, there will also be corporatisation and not privatisation of the Ordnance Factory Board, Sitharaman said.
4. Civil Aviation
Speaking of airspace management, Sitharaman pointed out that optimum usage needs to be done, which will reduce both the time and the amount of fuel spent. She said that airspace availability would be improved.
Restrictions on the utilisation of Indian airspace will be eased so that civilian flying becomes more efficient, which will bring about aa total benefit of Rs. 1000 crores per year for the aviation sector.
The finance minister also announced that six more airports will be on auctioned on a PPP basis and that there would be Rs 13,000 crore additional investment by private players in 12 airports.
The Airports Authority of India (AAI) will get a down payment of Rs 2300 crore, Sitharaman said.
5. Power Sector
FM Sitharaman said that power distribution companies in UTs will be privatised, and that a tariff policy with reforms will be released, including consumer rights, promotion of industry and sustainability of sector.
This will bring about efficiency in power distribution, and create a model that will first be implemented in UTs, she said.
6. Distribution Companies
The FM said that private sector investment in social Infrastructure would be boosted through a revamped Viability Gap Funding Scheme of Rs 8100 crores as social infrastructure suffers from poor viability.
The government will enhance the quantum of Viability Gap Funding upto 30 percent of total VGF by state/statutory bodies, the FM said.
7. Space Sector
The FM said that private sector would be encouraged to enter the space exploration sector and that they would be given access. They will also be given access to ISRO facilities and other relevant assets to improve their capacities.
The FM also said that future outer space travel would be opened to private sectors as well. A liberal geo-spatial data policy will also be introduced to provide remote sensing data for tech entrepreneurs here.
“The Indian private sector will be a co-traveller in India's space sector journey. We will provide a level-playing field for private companies in satellites, launches and space-based services,” Sitharaman said.
8. Atomic Energy
Speaking about the atomic energy sector, FM Sitharaman said that a research reactor in PPP mode would be established for the production of medical isotopes for affordable cancer treatment.
She also said that there would be establishment of facilities in PPP mode to use radiation technology for food preservation which would compliment agricultural reforms and assist farmers.
Finally, she also announced that technology development-cum incubation centres would be set up for fostering synergy between research facilities and tech-entrepreneurs.
Measures Announced in Previous Tranches
On Friday, FM Sitharaman announced 11 measures, of which eight relate to strengthening infrastructure, capacities and building better logistics, while the remaining three pertain to governance and administrative reform.
Some of the key announcements made were that the government would allocate Rs 1 lakh crore for farm gate infrastructure, the introduction of a Rs 10,000 crore scheme for the formalisation of Micro Food Enterprises (MFE), and the launch of a Rs 20,000 crore Pradhan Mantri Matsya Sampada Yojana for development of marine and inland fisheries. This programme is expected to provide 55 lakh people with employment.
In her second press conference to explain the economic package, Sitharaman had shared relief measures for the migrant workers, farmers, street vendors, and marginal traders.
Introducing national portability cards under the ‘One Nation, One Ration Card’ scheme, the Finance Minister said workers in any part of the the country can avail of ration.
Among the major announcements, Sitharaman set out a Rs 5,000 special credit facility for nearly 50 lakh street vendors, free food grains supply to all migrant workers for the next two months and Rs 30,000 crores additional emergency working capital funding through NABARD to farmers.
On Wednesday, in the first tranche of economic relief measures, the FM had announced six relief measures for MSMEs including several categories of collateral free loans, raised investment limits for micro enterprises and relief measures for taxpayers and real estate as a part of the ‘Atmanirbhar Bharat Abhiyan’ package.
PM Modi had announced the 'Atmanirbhar Bharat Abhiyan' which is estimated to be around 10 percent of the country’s GDP on Tuesday, 12 May.
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)