Govt unveils bold reforms to boost economy
FDI in defence production increased to 74%, focus on Make-in-India UT discoms will be privatised
On Saturday, day-four of back-to-back announcements of the `20 lakhcrore Covid-19 relief package, finance minister Nirmala Sitharaman unveiled several structural reforms across at least eight sectors, including opening up the coal sector to commercial mining and hiking foreign direct investment (FDI) limit in defence manufacturing from 49 to 74 per cent. The government’s big thrust across the eight crucial sectors — coal, minerals, defence production, airspace management, airports, MRO, power distribution companies in UTs, space, and atomic energy — was privatisation and corporatisation.
The announcement of reforms came after FM revealed, over three successive days, several liquidity measures for small businesses, street vendors, farmers and migrant labourers.
Outlining the focus on eight important growthoriented sectors, Ms Sitharaman said, “Our Prime Minister has been spearheading the reform charge in which we need to decongest the sectors and policy simplifications to attract more investment into the country. Besides, we must prepare tough competition to go global as reforms are new horizon for the growth.” The three stimulus packages announced so far have largely been either credit guarantee schemes or new fund via refinancing routes, while cash aid for any sector is negligible, including budgetary spending. “Most of the policy initiatives have already been announced in this year’s Budget and we are extending some of them and taking new measures owing to lockdowns due to Covid-19 pandemic,” a top government source said. One of the major decisions announced on structural reforms on
Saturday was raising the FDI limit to 74 per cent in defence manufacturing sector under automatic route. In a move to push “Make-in-India” and make the country selfreliant, the government said that defence import will come down, thereby banning some import on defence equipments like weapons and platforms.
In another significant decision in the coal and mineral sector, Ms Sitharaman said the government would be bringing in commercial mining in coal business and its monopoly would be removed. “About `50,000 crore will be spent to ensure evacuation infrastructure is being provided in the coal sector. Also, we want to remove distinction between captive and non-captive mines to allow transfer of mining leases,” she said. Besides, 500 mineral blocks would be offered through an open and transparent auction process, a joint auction of bauxite and coal mineral blocks will be introduced to enhance aluminium industry’s competitiveness. Also, coal bed methane extraction rights to be auctioned from coal mines.
For aviation sector, she said civil aviation is up for a big leap. “Only about 60 per cent of Indian airspace is freely available. Restrictions on utilisation of the Indian airspace will be eased so that civilian flying becomes more efficient. We want to bring in benefit of about `1,000 crore per year.”
Throwing light on power tariffs, she said power distribution companies or DISCOMs in Union Territories will be privatised.
Our Prime Minister has been spearheading the reform charge in which we need to decongest the sectors and policy simplifications to attract more investment
— Nirmala Sitharaman,
FM