Union Finance Minister Nirmala Sitharaman on Saturday, May 16, announced the fourth tranche of Rs 20 lakh crore economic package under the “Atmanirbhar Bharat project.
Addressing the media, the finance minister said that the country needed to be ready for stiff competition in the global market to become self-reliant.
The policy reforms associated with new horizons of growth as announced are as follows;
Policy Reforms to fast-track Investment
- Fast track Investment Clearance through Empowered Group of Secretaries (EGoS).
- Project Development Cell in each Ministry to prepare investible projects, coordinate with investors and Central/ State Governments
- Ranking of States on Investment Attractiveness to compete for new investments
- Incentive schemes for Promotion of New Champion Sectors will be launched in sectors such as Solar PV manufacturing; Advanced cell battery storage; etc.
Upgradation of Industrial Infrastructure
- Scheme will be implemented in States through Challenge mode for Industrial Cluster Upgradation of common infrastructure facilities and connectivity.
- Availability of Industrial Land/ Land Bank for promoting new investments and making information available on Industrial Information System (IIS) with GIS mapping.
- 3376 industrial parks/estates/SEZs in 5 lakh hectares mapped on Industrial Information System (IIS)
- All industrial parks will be ranked in 2020-21
Commercial Mining in Coal Sector
- Need to reduce import of substitutable coal and increase Self Reliance in coal production. • Government will introduce competition, transparency and private sector participation in the Coal Sector through revenue sharing mechanism instead of regime of fixed Rupee/tonne. Earlier, only captive consumers with end-use ownership could bid. Now, any party can bid for a coal block and sell in the open market.
- Nearly 50 blocks to be offered immediately. No eligibility conditions, only upfront payment with a ceiling.
- Exploration-cum-production regime for partially explored blocks
Diversified Opportunities in Coal Sector – Investment of Rs 50,000 crores
- Coal Gasification / Liquefication will be incentivised through rebate in revenue share.
- Infrastructure development of Rs. 50,000 crores. For evacuation of enhanced CIL’s target of 1 billion tons coal production by 2023-24 plus coal production from private blocks. This includes Rs 18,000 cr worth of investment in mechanized transfer of coal (conveyor belts) from mines to railway sidings. This measure will help reduce environmental impact
- Coal Bed Methane (CBM) extraction rights to be auctioned from Coal India Limited’s (CIL) coal mines.
- Ease of doing business measures, such as Mining Plan simplification, will be taken.
- Concessions in commercial terms given to CIL’s consumers (relief worth Rs 5000 cr offered)
- Introduction of a seamless composite exploration-cum-mining-cum-production regime.
- 500 mining blocks would be offered through an open and transparent auction process
- Introduce Joint Auction of Bauxite and Coal mineral blocks to enhance Aluminum Industry’s competitiveness
Mineral Sector
- Remove distinction between captive and noncaptive mines to allow transfer of mining leases and sale of surplus unused minerals, leading to better efficiency in mining and production.
- Ministry of Mines is in the process of developing Mineral Index for different minerals
- Rationalisation of stamp duty payable at the time of award of mining leases.
Self Reliance in Defence Production
- ‘Make in India’ for Self-Reliance in Defence Production: Notify a list of weapons/platforms for ban on import with year wise timelines; Indigenisation of imported spares; Separate budget provisioning for domestic capital procurement. Will help reduce huge Defence import bill.
- Improve autonomy, accountability and efficiency in Ordnance Supplies by Corporatisation of Ordnance Factory Board.
- FDI limit in the defence manufacturing under automatic route will be raised from 49% to 74%
- Time-bound defence procurement process and faster decision making will be ushered in by setting up of a Project Management Unit (PMU) to support contract management, realistic setting of General Staff Qualitative Requirements (GSQRs) of weapons/platforms and overhauling Trial and Testing procedures
- Reduction in Flying cost Rs. 1000 crores – Efficient Airspace Management for Civil Aviation — Restrictions on utilisation of the Indian Air Space will be eased so that civilian flying becomes more efficient.
World-class Airports through PPP
- AAI has awarded 3 airports out of 6 bid for Operation and Maintenance on Public-Private Partnership (PPP) basis.
- Annual Revenue of 6 airports in 1st round – Rs 1000 crores (against current profit of Rs 540 crores per year). AAI will also get a down payment of Rs 2300 crores.
- 6 more airports identified for 2nd round. Bid process to commence immediately.
- Additional Investment by private players in 12 airports in 1 st and 2nd rounds expected around Rs. 13,000 crores.
- Another 6 airports will be put out for the third round of bidding.
- India to become a global hub for Aircraft Maintenance, Repair and Overhaul (MRO) — Tax regime for MRO ecosystem has been rationalized. Aircraft component repairs and airframe maintenance to increase from Rs 800 crores to Rs 2000 crores in three years. Major engine manufacturers in the world would set up engine repair facilities in India in the coming year. Convergence between defence sector and the civil MROs will be established to create economies of scale.
Tariff Policy Reform
Tariff Policy laying out the following reforms will be released:
- Consumer Rights
- DISCOM inefficiencies not to burden consumers
- Standards of Service and associated penalties for DISCOMs
- DISCOMs to ensure adequate power; load-shedding to be penalized
- Promote Industry
- Progressive reduction in cross subsidies
- Time bound grant of open access
- Generation and transmission project developers to be selected competitively
- Sustainability of Sector
- No Regulatory Assets
- Timely payment of Gencos
- DBT for subsidy; Smart prepaid meters
Privatization of Distribution in UTs
- Sub-optimal performance of power distribution & supply
- Power Departments / Utilities in Union Territories will be privatised.
- Will lead to better service to consumers and improvement in operational and financial efficiency in Distribution
- Provide a model for emulation by other Utilities across the country
Boosting private sector investment in Social Infrastructure through revamped Viability Gap Funding Scheme – Rs 8100 crores
- Government will enhance the quantum of Viability Gap Funding upto 30% each of Total Project Cost as VGF by Centre and State/Statutory Bodies.
- For other sectors, VGF existing support of 20 % each from GoI and States/Statutory Bodies shall continue
- Projects to be proposed by Central Ministries/ State Government/ Statutory entities.
Boosting private participation in Space activities
- Indian private sector will be a co-traveller in India’s space sector journey.
- Will provide level playing field for private companies in satellites, launches and space-based services.
- 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, outer space travel etc to be open for private sector.
- Liberal geo-spatial data policy for providing remote-sensing data to tech-entrepreneurs.
Atomic Energy related Reforms
- Establish research reactor in PPP mode for production of medical isotopes – promote welfare of humanity through affordable treatment for cancer and other diseases.
- Establish facilities in PPP mode to use irradiation technology for food preservation – to compliment agricultural reforms and assist farmers.
- Link India’s robust start-up ecosystem to nuclear sector – Technology Development cum Incubation Centres will be set up for fostering synergy between research facilities and tech-entrepreneurs.