Finance Minister Nirmala Sitharaman on Saturday (16 May) unveiled structural reforms in eight sectors while announcing the fourth tranche of government's Rs 20 lakh crore economic package.
Sitharaman said steps taken during the recent past include fast track investment clearance though an empowered group of secretaries (EGoS). Project development cell has been set up in each ministry to prepare investable projects and coordinate with investors and central/state government. States are being ranked on investment attractiveness to compete for new investments. Incentive schemes for the promotion of new champion sectors will be launched in sectors such as solar PV manufacturing and advanced cell battery storage.
FM said 3376 industrial parks/estates/SEZs in 5 lakh hectares are mapped on Industrial Information System (IIS). All industrial parks will be ranked in 2020-21.
Coal Sector: The government will introduce commercial mining of coal by the private sector, ending government monopoly on the sector. It will be done on revenue sharing mechanism instead of the regime of fixed rupee/tonne. Nearly 50 blocks will be offered for bidding, FM said. This is being done to reduce import of substitutable coal and increase self reliance in coal production. The government will also invest Rs 50,000 crore for building coal evacuation infrastructure.
Mineral mining: FM introduced a seamless composite exploration-cum-mining-cum-production regime. 500 mining blocks would be offered through an open and transparent auction process. Will also introduce a joint auction of bauxite and coal blocks to enhance the aluminium industry's competitiveness. This will also help aluminium industry reduce electricity costs.
The distinction between captive and non-captive mines will be removed to allow the transfer of mining leases and sale of surplus unused minerals, leading to better efficiency and production. Ministry of Mines is in the process of developing Mineral Index for different minerals. Stamp duties will be rationalised at the time of award of mining leases.
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Defense: To boost Make in India in defence production, Sitharaman said FDI limit in the defence manufacturing under automatic route will be raised from 49% to 74%.
Also, there will be indigenisation of some imported spares, FM said adding separate budget provisioning for domestic capital procurement will be done. This, she said, will reduce the huge defence import bill. Ordnance Factory Boards will be corporatised for better management.
Aviation: The finance minister announced easing of restrictions on utilisation of Indian air space, benefiting civil aviation sector by about Rs 1,000 crore per year. FM said only 60% of Indian airspace is freely available. More air space available would reduce travel time and save on fuel.
Six more airports will be auctioned for private participation. Also, an additional investment of Rs 13,000 crore will be made by private players in 12 airports auctioned in first and second rounds.
FM also said tax regime for aircraft Maintenance, Repair and Overhaul (MRO) has been rationalised. Aircraft component repair and airframe maintenance are expected to increase from Rs 800 crore to Rs 2,000 crore in three years, she added.
Major engine manufacturers in the world would set up engine repair facilities in India in the coming year. Following this, maintenance cost for airlines will come down.
Discoms in UTs: FM said electricity distribution companies in Union Territories (UTs) will be privatised. This will lead to better service to consumers and improvement in operational and financial efficiency in Distribution. It will also provide a model for emulation by other Utilities across the country.
Social infrastructure: Rs 8,100 crore will be provided as viability gap funding (VGF) for development of social infrastructure. FM said social infrastructure projects suffer from poor viability. Therefore, the government will enhance the quantum of viability gap funding up to 30% each of the total project cost as VGF by central and state/statutory bodies. For other sectors, existing VGF support of 20% each from the government of India and state/statutory bodies shall continue.
Private participation in space activities: FM announced giving the private sector a role in India's space programme, including in satellites, launches and space-based services. Also, the government will provide predictable policy and regulatory environment to private players. Private sector will be allowed to use ISRO facilities and other relevant assets to improve their capacities. Future projects for planetary exploration and outer space travel would be open for private sector, she said, adding liberal geo-spatial data policy will provide remote sensing data to tech-entrepreneurs.
Atomic energy reforms: India will set up a research reactor in public-private partnership (PPP) mode. This will produce medical isotopes and make available affordable treatment for cancer and other diseases. The research reactor in PPP mode would use irradiation technology for food preservation - to compliment agricultural reforms and assist farmers.
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