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Sitharaman announces structural reforms in 8 sectors to build self reliant India

Finance Minister Nirmala Sitharaman unveiled structural reforms for various sectors to help build a self-reliant India under the Atma Nirbhar Bharat Campaign, today

Policy Reforms to fast-track Investment – Effort towards AtmanirbharBharat

  • Fast track Investment Clearance through Empowered Group of Secretaries (EGoS).
  • Project Development Cell in each Ministry to prepare investible projects, coordinate with investors and Central/ State Governments
  • Ranking of States on Investment Attractiveness to compete for new investments
  • Incentive schemes for Promotion of New Champion Sectors will be launched in sectors such as Solar PV manufacturing; Advanced cell battery storage; etc.

Upgradation of Industrial Infrastructure

  • Scheme will be implemented in States through Challenge mode for Industrial Cluster Upgradation of common infrastructure facilities and connectivity.
  • Availability of Industrial Land/ Land Bank for promoting new investments and making information available on Industrial Information System (IIS) with GIS mapping.
  • 3376 industrial parks/estates/SEZs in 5 lakh hectares mapped on Industrial Information System (IIS)
  • All industrial parks will be ranked in 2020-21

Policy Reforms – Introduction of Commercial Mining in Coal Sector

Need to reduce import of substitutable coal and increase Selfreliance in coal production. Government will introduce competition, transparency and private sector participation in the Coal Sector through :

  • Revenue sharing mechanism instead of regime of fixed Rupee/tonne
  •  • Earlier, only captive consumers with end-use ownership could bid.
  •  • Now, any party can bid for a coal block and sell in the open market.
  •   • Entry norms will be liberalized
  •  • Nearly 50 blocks to be offered immediately.
  •  • No eligibility conditions, only upfront payment with a ceiling.

Policy Reforms – Introduction of Commercial Mining in Coal Sector                                                              • Exploration-cum-production regime for partially explored blocks                                                             • Against earlier provision of auction of fully explored coal blocks, now even partially explored blocks to be auctioned.                                                                                                                                                        

  • Will allow private sector participation in exploration.                                                                                                       Production earlier than scheduled will be incentivized through rebate in revenue-share

Policy Reforms – Diversified Opportunities in Coal Sector – Investment of Rs 50,000 crores.

  • Coal Gasification / Liquefication will be incentivised through rebate in revenue share.
  • Will result in significantly lower environment impact
  • Will assist India in switching to a gas-based economy
  • Infrastructure development of Rs. 50,000 crores
  • For evacuation of enhanced CIL’s target of 1 billion tons coal production by 2023-24 plus coal production from private blocks.
  • Includes Rs 18,000 cr worth of investment in mechanized transfer of coal (conveyor belts) from mines to railway sidings.
  • This measure will also help reduce environmental impact

Policy Reforms –Liberalised Regime in Coal Sector

  • Coal Bed Methane (CBM) extraction rights to be auctioned from Coal India Limited’s (CIL) coal mines.
  • Ease of doing business measures, such as Mining Plan simplification, will be taken.
  • Mining Plan has been shortened, made amenable for loading online

. • To allow for automatic 40% increase in annual production.

  • Concessions in commercial terms given to CIL’s consumers (relief worth Rs 5000 cr offered)
  • Reserve price in auctions for non-power consumers reduced, credit terms eased, and lifting period enhanced.

Enhancing Private Investments in the Mineral Sector

Structural reforms to boost growth, employment and bring state-of-the-art technology especially in exploration through:

  • Introduction of a seamless composite exploration-cum-mining-cum-production regime.
  • 500 mining blocks would be offered through an open and transparent auction process
  • Introduce Joint Auction of Bauxite and Coal mineral blocks to enhance Aluminum Industry’s competitiveness. Will help aluminium industry reduce electricity costs.

Policy Reforms – Mineral Sector

  • Remove distinction between captive and noncaptive mines to allow transfer of mining leases and sale of surplus unused minerals, leading to better efficiency in mining and production.
  • Ministry of Mines is in the process of developing Mineral Index for different minerals
  • Rationalisation of stamp duty payable at the time of award of mining leases.

Enhancing Self Reliance in Defence Production

  • ‘Make in India’ for Self-Reliance in Defence Production:
  • Notify a list of weapons/platforms for ban on import with year wise timelines;
  • Indigenisation of imported spares;
  • Separate budget provisioning for domestic capital procurement.
  • Will help reduce huge Defence import bill.
  • Improve autonomy, accountability and efficiency in Ordnance Supplies by Corporatisation of Ordnance Factory Board.

Policy Reforms – Defence Production   

  • FDI limit in the defence manufacturing under automatic route will be raised from 49% to 74%
  • Time-bound defence procurement process and faster decision making will be ushered in by :
  • Setting up of a Project Management Unit (PMU) to support contract management;
  • Realistic setting of General Staff Qualitative Requirements (GSQRs) of weapons/platforms;
  • Overhauling Trial and Testing procedures

Reduction in Flying cost Rs. 1000 crores – Efficient Airspace Management for Civil Aviation

  • Only 60% of the Indian airspace freely available.
  • Restrictions on utilisation of the Indian Air Space will be eased so that civilian flying becomes more efficient
  • Will bring a total benefit of about Rs 1000 crores per year for the aviation sector.
  • Optimal utilization of airspace; reduction in fuel use, time
  • Positive environmental impact.

More World-class Airports through PPP

  • AAI has awarded 3 airports out of 6 bid for Operation and Maintenance on Public-Private Partnership (PPP) basis.
  • Annual Revenue of 6 airports in 1st round – Rs 1000 crores (against current profit of Rs 540 crores per year). AAI will also get a down payment of Rs 2300 crores.
  • 6 more airports identified for 2nd round. Bid process to commence immediately.
  • Additional Investment by private players in 12 airports in 1 st and 2nd rounds expected around Rs. 13,000 crores.
  • Another 6 airports will be put out for the third round of bidding.

India to become a global hub for Aircraft Maintenance, Repair and Overhaul (MRO)

  • Tax regime for 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.

Tariff Policy Reform

A Tariff Policy laying out the following reforms will be released:

  1. Consumer Rights
  • DISCOM inefficiencies not to burden consumers
  • Standards of Service and associated penalties for DISCOMs
  • DISCOMs to ensure adequate power; load-shedding to be penalized
  1. Promote Industry
  • Progressive reduction in cross subsidies ‘
  • Time bound grant of open access
  • Generation and transmission project developers to be selected competitively
  1. Sustainability of Sector
  • No Regulatory Assets
  • Timely payment of Gencos
  • DBT for subsidy; Smart prepaid meters

Privatization of Distribution in UTs

  • Sub-optimal performance of power distribution & supply
  • Power Departments / Utilities in Union Territories will be privatised.
  • Will lead to better service to consumers and improvement in operational and financial efficiency in Distribution
  • Provide a model for emulation by other Utilities across the country.

Boosting private sector investment in Social Infrastructure through revamped Viability Gap Funding Scheme – Rs 8100 crores

  • Social Infrastructure Projects suffer from poor viability.
  • Government will enhance the quantum of Viability Gap Funding upto 30% each of Total Project Cost as VGF by Centre and State/Statutory Bodies.
  • For other sectors, VGF existing support of 20 % each from GoI and States/Statutory Bodies shall continue
  • Total outlay is Rs. 8100 crores
  • Projects to be proposed by Central Ministries/ State Government/ Statutory entities.

Boosting private participation in Space activities

  • Indian private sector will be a co-traveller in India’s space sector journey.
  • Will provide level playing field for private companies in satellites, launches and space-based services.
  • Will provide predictable policy and regulatory environment to private players.
  • Private sector will be allowed to use ISRO facilities and other relevant assets to improve their capacities.
  • Future projects for planetary exploration, outer space travel etc to be open for private sector.
  • Liberal geo-spatial data policy for providing remote-sensing data to tech-entrepreneurs.

Atomic Energy related Reforms

  • Establish research reactor in PPP mode for production of medical isotopes – promote welfare of humanity through affordable treatment for cancer and other diseases.
  • Establish facilities in PPP mode to use irradiation technology for food preservation – to compliment agricultural reforms and assist farmers.
  • Link India’s robust start-up ecosystem to nuclear sector – Technology Development cum Incubation Centres will be set up for fostering synergy between research facilities and tech-entrepreneurs.

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