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Know all about structural reforms across eight sectors paving the path for Aatma Nirbhar Bharat

Know all about structural reforms across eight sectors paving the path for Aatma Nirbhar Bharat

5/27/2020

Know all about structural reforms across eight sectors paving the path for Aatma Nirbhar Bharat
Image for Know all about structural reforms across eight sectors paving the path for Aatma Nirbhar Bharat

In her opening remarks, the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman said that structural reforms are the focus for the press conference. She said that many sectors need policy simplification to make it easier for people to understand what each sector can offer, participate in activities, and bring transparency. Once the sectors are decongested, it will boost their growth, the Finance Minister added.

The Finance Minister further emphasized that Prime Minister Shri Narendra Modi has a very strong record of implementing deep systemic reforms, citing the Direct Benefit Transfer which enabled money to be given directly to people, GST that brought in “One Nation, One Market,” the Insolvency & Bankruptcy Code (IBC) that resolved insolvency issues, and various steps taken for the Ease of Doing Business.

During the press conference, Smt. Sitharaman also outlined the need for policy reforms to fast-track investments and the steps the Government has taken in this regard. She mentioned that fast-track clearance is being facilitated through the Empowered Group of Secretaries, and a Project Development Cell would be set up in each Ministry to prepare investable projects and coordinate with investors and central and state governments.

The Finance Minister announced the following policy reforms to fast-track investment as part of the effort toward Aatma Nirbhar Bharat:

  • Fast-tracking investment clearance through Empowered Group of Secretaries.
  • Establishment of a Project Development Cell in each Ministry to prepare investable projects and coordinate with investors and central/state governments.
  • Ranking states based on investment attractiveness to compete for new investments.
  • Launching incentive schemes for promoting new champion sectors like solar PV manufacturing, advanced cell battery storage, etc.

Smt. Sitharaman also announced that a scheme will be implemented in states through a challenge mode for the upgradation of industrial clusters, focusing on common infrastructure facilities and connectivity. There will be availability of industrial land/land banks for promoting new investments, and the information will be made available on the Industrial Information System (IIS) with GIS mapping. A total of 3,376 Industrial Parks, Estates, and SEZs covering five lakh hectares have been mapped on the IIS. All industrial parks will be ranked during 2020-21.

The Finance Minister today also announced structural reforms in eight sectors: Coal, Minerals, Defence Production, Civil Aviation, Power, Social Infrastructure, Space, and Atomic Energy. The details are as follows:

A. COAL SECTOR

  1. Introduction of Commercial Mining in the Coal Sector
    The government will introduce competition, transparency, and private sector participation through:
  • A revenue-sharing mechanism, replacing the fixed Rupee/tonne system. Any party can bid for a coal block and sell in the open market.
  • Liberalized entry norms with nearly 50 blocks being offered immediately, with no eligibility conditions except for an upfront payment.
  • Introduction of exploration-cum-production regimes for partially explored blocks, allowing private sector participation in exploration.
  • Incentives for early production through rebates in revenue share.
  1. Diversified Opportunities in Coal Sector
  • Incentives for coal gasification/liquefaction to reduce environmental impact and support India’s transition to a gas-based economy.
  • Rs. 50,000 crore for infrastructure development for coal evacuation and Rs. 18,000 crore for mechanized transfer of coal, improving environmental sustainability.
  1. Liberalized Regime in Coal Sector
  • Auctioning of Coal Bed Methane (CBM) extraction rights from Coal India Ltd (CIL).
  • Simplifying mining plans to allow a 40% increase in annual production.
  • Offering concessions to CIL’s consumers and easing auction terms.

B. MINERAL SECTOR

  1. Enhancing Private Investments in the Mineral Sector
    Reforms to boost growth and bring state-of-the-art technology:
  • Introduction of seamless composite exploration, mining, and production regimes.
  • Offering 500 mining blocks through an open and transparent auction process.
  • Joint auction of Bauxite and Coal mineral blocks to improve the aluminum industry’s competitiveness.
  1. Policy Reforms in the Mineral Sector
  • Removing the distinction between captive and non-captive mines for better efficiency.
  • Developing a Mineral Index for various minerals and rationalizing stamp duty on mining leases.

C. DEFENCE SECTOR

  1. Enhancing Self-Reliance in Defence Production
  • Promotion of “Make in India” for self-reliance by banning imports of specific weapons/platforms and indigenizing imported spares.
  • Corporatization of the Ordnance Factory Board to improve autonomy and efficiency.
  1. Policy Reforms in Defence Production
  • Raising FDI limit in defence manufacturing from 49% to 74%.
  • Time-bound defence procurement and setting up a Project Management Unit (PMU) for faster decision-making.

D. CIVIL AVIATION SECTOR

  1. Efficient Airspace Management
  • Easing restrictions on the utilization of Indian airspace to make civilian flying more efficient, saving approximately Rs 1,000 crore annually.
  1. More World-Class Airports through PPP
  • Identifying six additional airports for public-private partnership (PPP) bidding. Private investment in airports is expected to bring in around Rs 13,000 crore.
  1. India to Become a Global Hub for Aircraft Maintenance, Repair, and Overhaul (MRO)
  • Rationalizing the tax regime to increase MRO activities, boosting the aviation sector.

E. POWER SECTOR

  1. Tariff Policy Reform
    Reforms include:
  • Ensuring consumer rights, such as reducing inefficiencies in DISCOMs and improving service standards.
  • Progressive reduction in cross-subsidies and competitive selection of power developers.
  1. Privatization of Distribution in UTs
  • Power departments in Union Territories will be privatized to improve service quality and efficiency.

F. SOCIAL INFRASTRUCTURE

  • A revamped Viability Gap Funding scheme of Rs 8,100 crore will be implemented to boost private sector investments in social infrastructure projects.

G. SPACE SECTOR

  • Providing a level playing field for private companies in satellites, launches, and space-based services. ISRO’s assets will be made available for private sector use.

H. ATOMIC ENERGY REFORMS

  • Establishing a research reactor for medical isotope production in PPP mode to aid cancer treatment.
  • Linking India’s robust start-up ecosystem with nuclear technology to promote innovation.

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