Finance minister proposes structural reforms in 8 sectors to boost investment, create jobs

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Finance Minister roll out fourth set of the Rs.20 lakh economic situmulus package announced by Prime Minister Narendra Modi to bost the Covid-19 battered economy. 

Hike in FDI limit in defence manufacturing sector, privatisation of power distribution companies in Union Territories, easing of restrictions on Indian airspace, linking of India's start-up ecosystem to nuclear sector and creation of social infrastructure projects through revamped viability gap funding scheme are among the key measures announced by Finance Minister Nirmala Sitharaman in the fourth tranche of the government’s Rs.20 lakh crore economic package.

The finance minister on Saturday unveiled comprehensive structural reforms on defence production, airspace management, MROs, power distribution companies, space sectors and atomic energy. She said that the reforms will impact those sectors which are new horizons of growth, unleashing new investment, boosting production and creating jobs.

The finance minister said that the FDI limit in defence manufacturing sector under automatic route will be raised from 49 per cent to 74 per cent. She announced project management units to ensure time bound defence procurement process and faster decision making.

She said that all power distribution companies in Union Territories will be privatised in line with tariff policy reforms. This will lead to better service to consumers and improvement in operational and financial efficiency in distribution.

As regards aviation sector, the finance minister said that the restrictions on utilisation of Indian airspace will be eased so that civil flying becomes more efficient. This will bring total benefit of about Rs 1,000 per year for the sector.

In order to provide level playing field for private companies in satellites, private sector will be allowed to use ISRO facilities and other relevant assets to improve their capacities. She said that the government will establish a research reactor in PPP mode for production of medical isotopes. This will promote welfare of humanity through affordable treatment for cancer and other diseases.

Sitharaman has proposed creation of social infrastructure projects worth Rs 8,100 crore through revamped viability gap funding scheme has been proposed. Government will enhance the quantum of viability gap funding up to 30 per cent each of total project cost.

She said that the government would bring in commercial mining in coal sector and end government's monopoly in the sector. Rs 50,000 crore will be spent to ensure evacuation infrastructure in coal sector. The government wants to remove distinction between captive and non-captive mines to allow transfer of mining leases.

500 mining 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 aluminum industry's competitiveness.

An empowered group of secretaries has been formed to fast-track infrastructure investment, ranking states for investment attractiveness, project development cells have been formed, champion sectors being promoted.

After PM's address to the nation on building an aatmanirbhar Bharat, the finance minister has been announcing details of the stimulus. In the first three tranches the government announced a slew of measures for agriculture sector, amended the stringent Essential Commodities Act, offered credit lines to smaller firms, concessional credit to farmers, free food grains to migrant workers, working capital incentives for street vendors and support to shadow banking and electricity distributors, among other initiatives (with inputs from agencies)

Image Credit: Financial Express

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