Ease of Doing Business and Make in India are the key focus areas in the 4th Trench of stimulus measures by Modi Government
The COVID-19 pandemic is already affecting the lives of hundreds of thousands of Indians, and it’s poised to get worse before it gets better.The COVID-19 outbreak’s economic impacts will also be staggering and long-lasting. Every sector of the economy – from finance to airlines, retail to restaurants – is feeling the effects. Layoffs are happening across India. Jobless claims are skyrocketing. In order to support the Industry Prime Minister Modi announced relief Package through Atmanirbhar Bharat. The Micro details of the total package was announced by the Finance Minister Smt. Nirmala Sitaraman. The above article is the 4th set of Relief Measures.
Today’s announcements which was the 4th and the last in the relief package announced by the Modi Government were more focused on introducing structural reforms and the need to decentralize key revenue generating sectors.
After announcing a host of measures aimed at resurrecting MSMEs, rural economy and agriculture sector battered by the COVID-19 outbreak, Finance Minister Nirmala Sitharaman on May 16 unveiled the fourth tranche of stimulus package designed to help achieve the goal of Atmanirbhar Bharat.
Key annoucenments made by the Finance Minister:
MINING: Commercial coal mining to be introduced, removing government monopoly in the industry. Rs 50,000 crore will be spent for evacuation infrastructure, the government added in the statement.
Captive/Non Mines: Distinction between captive and non-captive mines would be removed to allow the transfer of mining leases and sale of surplus unused minerals. The move will help boost private investment in the minerals sector.
FDI:Foreign direct investment (FDI) limit in defence manufacturing has been hiked to 74 percent from 49 percent, through the automatic route. The government will also release a list of weapons/platforms for ban on import with year-wise timelines.
VGF:Creation of a Viability Gap Funding scheme, with a total outlay of Rs 8,100 crore, to boost private investment in social infrastructure projects.
AirSpace: Opening up of the Indian airspace, which is expected to give a benefit of Rs 1,000 crore per year to the aviation industry.
New Airports:Six more airports have been identified for the second round of bidding to operate under the public private partnership (PPP) model.
Power:Power departments / utilities in Union Territories (UTs) will be privatised, to improve service to consumers and efficiency in distribution.
ISRO:Private sector will be permitted to use the facilities if the Indian Space Research Organisation (ISRO) to improve their capacities. Future projects for planetary exploration, outer space travel, to be open for private sector.
Today’s announcements focused on introducing structural reforms and the need to decongest sectors.
Setting the tone for the press meet, Sitharaman said policy simplification is needed to get the economy back on track.
“We need to prepare for tough global competition. When we speak of Atmanirbhar Bharat, we are not looking inwards, it is not isolationist policy, it is making India rely on its strengths, ready to face global challenges,” she said.
In order to ensure the investment reboot takes off seamlessly, Sitharaman said the government will be fast-tracking investment clearances, there will be a special cell for seamless approvals and upgradation of industrial infrastructure.
The government is betting on these eight sectors to revive economic sentiments — Coal, minerals, defence, civil aviation, power distribution companies in UTs, space and atomic energy.
“The structural reforms being announced today will impact those sectors which are new horizons of growth, unleashing new investment, boosting production and creating jobs,” she said.
In the coal sector, government’s monopoly is being removed and commercial mining will now see light of the day. The government will spend Rs 50,000 crore to ensure evacuation infrastructure in coal sector.
To provide a fillip to the minerals sector, Sitharaman said there will be a seamless mining and exploration regime and 500 mining blocks will be offered, alongwith joint auction of bauxite and coal blocks
The distinction between captive and non-captive mines will be removed and stamp duty will also be rationalised.
In a major development for the defence sector, the FDI limit in the sector has been raised to 74 percent from 49 percent.
The government also said there will be ‘corporatisation’ of the ordnance boards and there will be a separate budget for procurement.
The aviation sector, reeling under massive losses, got a major boost with Sitharaman announcing that curbs on using Indian air space will be removed, thus reducing travel time.
“We will be able to get to our destination in shortest possible time saving fuel and time. It will entail benefits to the tune of of Rs 1,000 crore per year for the aviation sector,” Sitharaman said.
She also said that six more airports will be up for auction.
Sitharaman said India can become a global hub for Aircraft Maintenance, Repair and Overhaul (MRO).
“The tax regime for the MRO ecosystem has been rationalized. Aircraft component repairs and airframe maintenance to increase from Rs 800 crore to Rs 2,000 crore in three years,” she said.
To boost private sector investment in social infrastructure, she announced a revamped ‘Viability Gap Funding’ scheme of Rs 8,100 crore.
For the power sector, Sitharaman said a tariff policy with reforms will be released, including consumer rights, promotion of industry and sustainability of sector.
To encourage participation of private entities in space activities, private companies will be allowed to use ISRO’s facilities and other relevant assets to improve their capacities.
“Future projects for planetary exploration, outer space travel, etc. to be open for the private sector,” she said.
Ushering in reforms in the atomic energy sector, Sitharaman said research reactors to be done in PPP mode (for medical isotopes)
A PPP mode facility will be established for irradiation tech for food and the startup ecosystem will be linked with the nuclear sector
“Technology Development-cum-Incubation centres will be set up for fostering synergy between research facilities and tech entrepreneurs,” Sitharaman said.