FM Sitharaman unveils major reforms, gives private players some say in coal, defence and space
Under the Rs 20 lakh crore ‘Aatma Nirbhar Bharat’ package, the Finance Minister announced a slew of reforms in coal, defence, atomic and space sectors.
Finance Minister Nirmala Sitharaman on Saturday said the government will end its monopoly in coal mining by allowing private players into it. She said that against earlier provision of auction of fully explored coal blocks, now even partially explored blocks to be auctioned, while production earlier than scheduled will be incentivized through rebate in revenue-share.
While commercial mining will be on a revenue-sharing mechanism instead of earlier fixed rupee/tonne terms, nearly 50 blocks will be up for bidding, and the government will invest Rs 50,000 crore for building evacuation infrastructure.
She also said that a total 500 blocks of minerals will be auctioned in a composite exploration-cum-mining-cum-production regime. The distinction between captive and non-captive mines will be removed to allow the transfer of mining leases and the sale of surplus unused minerals, leading to better efficiency and production.
In the context of upgradation of industrial infrastructure she talked about availability of Industrial Land/ Land Bank for promoting new investments and making information available on Industrial Information System (IIS) with GIS mapping. She also talked about development of 3376 industrial parks/estates/SEZs in 5 lakh hectares mapped on Industrial Information System (IIS)
Giving boost to the government’s ‘Make in India’ campaign, she announced increasing foreign investment limit from 49 percent to 74 percent in manufacturing of defence equipment and putting restrictions on imports of some weapons and platforms. Items banned for imports can only be purchased from within the country, she said, adding that state-owned Ordnance Factory Boards will be corporatized for better management and will later be listed on the stock market.
She also talked about auctioning of six more airports to private players and easing restrictions on flying in Indian air space to reduce travel time and saving fuel. Only 60 percent of the Indian airspace is freely available. She said restrictions on utilisation of the Indian air space will bring a total benefit of about Rs 1000 crores per year for the aviation sector. Private players will invest an additional Rs 13,000 crore in 12 airports auctioned earlier.
The Finance Minister talked about making India a global hub for aircraft maintenance, repair and Overhaul (MRO). To this effect, the tax regime for the 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. Maintenance cost for airlines will come down.
With regard to the space sector, she emphasized on boosting private participation in Space activities. She said the country’s private sector will be a co-traveller in space sector journey. Private players will be provided with a level playing field in satellites, launches and space-based services. The government will provide a predictable policy and regulatory environment to private players and they will be allowed to use ISRO facilities and other relevant assets to improve their capacities.
She also made it clear that future projects for planetary exploration, outer space travel and others will be open for the private sector. Also, there will be liberal geo-spatial data policy for providing remote-sensing data to tech-entrepreneurs.
About atomic energy related reforms, the Finance Minister emphasized on establishing research reactors in PPP mode for production of medical isotopes – promote welfare of humanity through affordable treatment for cancer and other diseases.
She said establishing facilities in PPP mode to use irradiation technology for food preservation – to compliment agricultural reforms and assist farmers. She hinted at linking India’s robust start-up ecosystem to the nuclear sector – Technology Development cum Incubation Centres will be set up for fostering synergy between research facilities and tech-entrepreneurs.