Present concerns still not addressed in 4-part stimulus

NEWDELHI: Finance minister Nirmala Sitharaman on Saturday announced structural reforms across eight key sectors -- coal, minerals, defence, power, civil aviation, space, atomic energy and social infrastructure -- while announcing the fourth tranche of a ~20 lakh crore relief and stimulus package to help companies and individuals cope with the Covid-19 pandemic and the ongoing lockdown to fight its spread.

She also announced a ~58,100 crore financial package, largely in the infrastructure space.

The reforms — some very significant such as commercial mining, and an increase in foreign investment limits in defence equipment manufacturing units — follow those in agriculture announced on Friday, and were welcomed by experts . However, they also pointed out that the fiscal cost of the package is a fraction of the overall number .

Sitharaman said the government has raised FDI in defence manufacturing units to 74% from 49% under the automatic route. Other key announcements included introduction of commercial mining in the coal sector, corporatisation of the Ordnance Factory Board, easing of restrictions on the Indian air space and privatisation of six more airports.

She announced fiscal support of ~50,000 crore for coal infrastructure development, ~8,100 crore viability gap funding (VGF) in social infrastructure development and rationalisation of stamp duty on mining leases for power distribution.

In the past week, the Indian government unveiled historic reforms. But these will help in the medium- to long-term. The problem is, all of India — from migrant workers to large companies that have seen zero (or close-to-zero) revenue in May — needs shortterm succour.