Defence FDI limit up, coal mining open
Space exploration, atomic energy open to private firms
In the fourth tranche of economic package, the Centre on Saturday announced structural reforms in the crucial infrastructure sector by opening up coal mining, space exploration and atomic energy to private enterprises, relaxing norms for mining and aviation companies, increasing foreign investment in the defence sector and corporatising ordnance factories.
Outlining the focus on eight important growthoriented sectors, Union finance minister Nirmala Sitharaman said, “Our Prime Minister has been spearheading reforms to decongest the sectors to attract more investment into the country. Besides, we must prepare for tough competition to go global as reforms are a new horizon for economic growth.”
One of the major decisions on structural reforms includes raising the FDI limit from 49 per cent to 74 per cent in the defence manufacturing sector under automatic route. In a move to make ‘Make-in-India’ selfreliant, the government said that the defence import will come down, thereby banning some imports of defence equipment like weapons and platforms.
“While high-tech defence equipment will only be imported, the banned list of defence equipment will be continuously reviewed. And to ensure time-bound defence procurement process and faster decision making, project management units will be set up to support contract management,” Ms Sitharaman said, adding that the government will corporatise Ordnance Factory Board to improve autonomy, accountability in ordnance supplies.
In another significant decision on the coal and mineral sector, she also said the government would be bringing in commercial mining in the coal sector, ending decadeslong government monopoly. “About `50,000 crore will be spent to ensure evacuation infrastructure is being provided in the coal sector. Also, we want to remove the distinction between captive and noncaptive mines to allow transfer of mining leases,” she said.
For the creation of social infrastructure projects, the government has also earmarked a provision of `8,100 crore via viability gap funding (VGF).
For the aviation sector, Ms Sitharaman said the civil aviation sector is up for a big leap. “We will be able to get to our destination in the shortest possible time-saving fuel, time, cost. Only about 60 per cent of Indian airspace is freely available. Restrictions on the utilisation of the Indian airspace will be eased so that civilian flying becomes more efficient. We want to bring in a benefit of about `1,000 crore per year.”
“There are 6 more airports that are for auction. Additional investments are likely to be made by private players. On the tax front, the MRO ecosystem was rationalised. Airport component repairs and airframe maintenance to increase from `800 crore to `2,000 crore in 3 years,” she added.