Finance Minister Nirmala Sitharaman unveiled the fourth tranche of Centre's Rs 20 lakh crore fiscal stimulus which attempts to soften the blow of the coronavirus and the lockdown on the economy. She announced a number of structural reforms today in the coal, defence and civil aviation sector as she continues to give the finer details of the Rs 20 lakh crore stimulus announced by Prime Minister Narendra Modi earlier this week. The Finance Minister is likely to announce fund infusion for infrastructure lending.
Here are the Highlights of Nirmala Sitharaman's announcements on Day 4:
We have been announcing in several tranches the various steps we want to take, to extend assistance which as govt we should; and do it in time. We have PM Gareeb Kalyan Yojana, post that we ensured that people don't have to suffer filing returns etc. Relief announced for MSMEs and so on, but importantly, PM had also said that we should prepare ourselves for tough competition, so that we are strong enough to face global value chain and are also able to integrate. This is not an isolationist approach, this is making India ready and strong to face global challenges.
To be a self-reliant India, we need to toughen against competition. I repeat, by saying Atma Nirbhar Bharat, we are not looking inward or isolating ourselves. Many sectors need policy simplification. We need more transparent processes. Only when we decongest sectors will a boost for growth and employment happen.
Several steps were taken to ensure ease of business. PM Modi has been consistent in making sure reforms are taken up. Some significant reforms already done by PM Modi are - DBT (Direct Benefit Transfer), GST, IBC, Steps for Ease of Doing Business, Infusing equity and reforming Public Sector Banks, Direct Taxation Reforms, Power Sector Reforms, Coal Sector Reforms, and Water and Irrigation Sector Reforms. Structural reforms are today's focus.
Sectors to be impacted: The ones which will be new horizon for growth. See great potential in investments and will lead to lot more job avenues. Important to recall that steps taken earlier have been announced at different times and because of lockdown and COVID-19, it feels like it has been so long since budget, but it was presented only in February. Parliament also had to close due to reasons of social distancing. In February, we announced National Infrastructure Fund.
Policy reforms to fast-track investments: In the last couple of months, Empowered Group of Secretaries formed, they also look at investment attractiveness of industry. We want to make sure that efforts which are being taken clearly give us the confidence. Make in India was launched to change the mindset of people, today if I look at Make in India for Atma Nirbhar Bharat, the foundation was laid earlier. Rule of law and talent pools make India an attractive destination for producing in India and also for India. Schemes for these sectors.
Upgradation of industrial infrastructure is something which we need to talk about afresh, although industrial infrastructure and land banks have been identified long time back. Using technology, we are making sure that these land parcels are identified, common facilities needed would be ensured.
There are 8 sectors where reforms are being brought in today - coal, minerals, defence production, airports and aerospace management, power sector distribution companies in UTs, space sector, atomic energy sector and civil aviation.
SEZs, industrial parks spread in some 5 lakh hectares, it would be mapped so that investors don't face problems.
Coal: Bringing in commercial mining in coal sector. Coal is a government monopoly, it is being removed. Commercial mining on revenue-sharing basis will help availability at market prices. Incentives for those who produce before deadline. India has the third largest coal availability in untapped mines, i.e, third-most valuable deposit of coal, and we still import coal and we still at times feel energy sector is suffering. Regulations are needed when there is shortage, but India has been abundant in coal but we have been suffocating it. We are conscious that coal is not that environment friendly, providing incentive to turn coal into gas. Coal beds will also be auctioned. Coal bed extraction will also happen through auctioning. 50,000 crore to be spent by government for creating evacuation infrastructure to evacuate mined coal.
Aluminium, as per prevailing setup, if somebody need bauxite, which is raw material needed, he would have to go for a separate auction of bauxite. Many people had exited the nation due to mismatched policy. Joint auction of necessary items for aluminium industry, like bauxite and coal will be auctioned together.
We would like to remove distinction between captive and non-captive mines. Earlier someone would do the exploration, someone else would bid and someone else would do the production. Seamless composite mining infrastructure to be introduced. Rs 18,000 crore for making infrastructure like conveyor belts to carry to the train and incentives for addressing environmental concerns. 500 mining blocks to be provided through open transparent mechanism. Will develop mineral index. Mining lease can now be transferred. Rationalisation of stamp duties while mining leases are awarded.
Defence production: Make in India and self-reliance have now become a partner in the sense that for self-reliance, Make In India necessary, particularly in critical industries. Forces require best of equipment, the latest tech-driven equipment, some hi-tech equipment can be imported if needed. We have come to a conclusion, we shall notify a list of weapons and platforms which are not allowed for import, the import shall be banned and the list will be expanded.
GSQRs for weapons and platforms will be honoured, but the list of items notified can only be purchased from India. We have been producing spares good enough for imported platform, the spares are also something which we can produce but are getting imported. A separate budget provision will also be given for domestic capital procurement. Done in consultation with department of military affairs.
Bid to improve efficiency in ordinance. Corporatisation is not privatisation, the boards will be corporatised, we want them to be better managed, hope they will get listed eventually. FDI limit in defence production being raised to 74% from 49% subject to security clearance. Mechanism to ensure time-bound procurement, a project management unit will be set up.
Realistic setting of qualitative requirements. India has different climatic requirements but we need to be more efficient in trying and testing of procedures.
Airspace management: All these decades, we have been flying not through the shortest route but slightly longer route. Optimum utilisation of routes, customer ends up paying more, for pilots is extra flying. Above all, it saves time. Rationalisation is going to happen, we will be able to get to our destination in the shortest possible time.
Civil Aviation is up for a big leap. 6 more airports for auction, AAI shall do it on PPP basis. Additional investments likely by private players in about 12 airports which they are already holding. Airports will be much better.
Making India MRO hub (maintenance, repair and overhaul of aircraft): Most Indian planes go abroad. India has capacities, manpower. India can then be centre for flights which go to Southeast Asia, Australia and westwards too. Tax regime is being altered so that it favours setting up MRO in India. Defence aircraft can also benefit from this, apart from civil aircraft. Maintenance cost of all aircrafts will come down.
Power Distribution Companies - There will be privatisation here based on the tariff policy which will soon be in place. Inefficiencies of power companies will no longer have to be borne by customers. There will also be penalties for things like load-shedding. This will bring stability to DISCOMs and the power sector as a whole. Subsidy in the sector will also be done in the DBT (Direct Benefit Transfer) form. It will also rectify the sub-optimal output of power companies. Needless to say when efficiency will rise, quality of service will too.
Social Infrastructure Projects - Rs 8,100 crore outlay - for viability gap-funding. The government has decided to improve the quantum in this sector tom 20% to 30%.
Space: Private sector also doing a lot of work in space arena. Lots of individuals and organizations have spent time developing tech, but they can't use ISRO facilities for even testing facilities. We'll provide policy and regulatory environment for private players, we want them to be co-travelers with us.
Geospatial data: Liberal geospatial data policy. We want to provide remote sensing data, but with a lot of sense of caution.
Atomic Energy - There shall be a research reactor established in a PPP model. This will be strictly for medical isotopes only. We have seen how strong India's pharma sector is and how Indian medicines were sent the world over during COVID-19. It will also help improve research for cancer treatment. There will be facilities established in PPP mode to allow the use of radiation technology for food preservation. This will help setup incubation centres and help increase the preservation of food. This too will be allowed only for this purpose. This will help the agri sector. Currently the Atomic Energy sector is completely under the government.