On Saturday, May 16, Finance Minister Nirmala Sitharaman announced the fourth tranche of Modi government’s “Atmanirbhar Bharat Abhiyan” package worth Rs 20 lakh crores to restart the economy following the coronavirus lockdown.
Fourth tranche of announcements under “Atmanirbhar Bharat Abhiyan” economic package
FM Sitharaman in her press conference said that by building a self-reliant India, the country needs to prepare for global competition. She added that India also needs to face the challenges of the global value chain. “Prime Minister had said that we should prepare for tough 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,” said Finance Minister.
Finance Minister Nirmala Sitharaman added that Saturday’s announcements will be focussed on structural reforms. Many sectors need policy simplifications and Prine Minister has very good track record in taking strong, systemic reforms, she added.
The fourth tranche of the economic package will focus on eight sectors – coal, minerals, defence production, airspace managements/airports/MRO, power distribution companies in UTs, the space sector and atomic energy.
Policy reforms to fast-track investment in a bid to attain ‘Atmanirbhar Bharat’
Finance Minister listed policy reforms initiated in the last couple of months to fast-track investments.
Fast track investment clearance through Empowered Group of Secretaries (EGoS), the FM said. The Modi government will also set up a Project Development Cell in each Ministry to prepare a list of investible projects, which will coordinate with investors and central and state governments.
“Incentive schemes for Promotion of New Champion Sectors will be launched in sectors such as Solar PV manufacturing; advanced cell battery storage,” the FM added.
Upgradation of Industrial Infrastructure
The FM added a scheme will be implemented in states through ‘challenge mode’ for industrial cluster up-gradation of common infrastructure facilities and connectivity. “Availability of industrial land/land banks for promoting new investments and making information available on Industrial Information System (IIS) with GIS mapping. All industrial parks will be ranked by 2020-21,” the FM announced.
She also added that 3376 industrial parks/estates/SEZs in five lakh hectares will be mapped on IIS.
The Modi government, in a significant decision, said that it will open up the coal sector for commercial mining. The government monopoly in coal mining being removed, said Finance Minister. “This will be done based on a revenue-sharing mechanism instead of a regime of a fixed rupee per tonne. Any party can bid for a coal block and sell in the open market,” the FM announced.
“India has the 3rd largest valued coal availability in its untapped mines, and yet we still import coal and emerging sectors suffer because raw material is not available. Regulations are required when there is a shortage. But this country has abundant coal. Coal bed methane will also be auctioned. Rs 50,000 crore for evacuation infrastructure is being provided,” Finance Minister added.
The government will offer nearly 50 blocks immediately with no eligibility conditions, but only upfront payment with a ceiling.
Mining of minerals
The sectoral reform for mining of minerals will boost growth, employment and bring state-of-the-art technology especially in exploration, said Finance Minister Nirmala Sitharaman.
“The government is set to introduce a seamless composite exploration-cum-mining-production regime. 500 mining blocks will be offered through an open and transparent auction process. The govt will also introduce a joint auction of bauxite and coal mineral blocks to enhance the aluminum industry’s competitiveness. This will help the industry reduce electricity costs,” announced FM.
The Modi government also announced that the Ministry of Mines is in the process of developing a Mineral Index for different minerals. Rationalisation of stamp duty will be done, which is to be paid at the time of award of mining leases.
The Finance Minister on Saturday announced Make In India and Self-Reliance have now become a partner in country’s defence production.
FM Nirmala Sitharaman said the government will notify a list of weapons/platforms for ban on import with year-wise timelines, and will also ensure indigenisation of imported spares. For this, a separate budget will be given for domestic capital procurement. This will also reduce the huge defence import bill, the Modi government announced.
In the defence sector, the government aims at improving autonomy, accountability and efficiency in Ordnance Suppliers by Corporatisation of Ordnance Factory Board.
The government has also announced that FDI limit in defence manufacturing under automatic route being raised from 49 percent to 74 percent.
The government will also begin time-bound defence procurement and faster decision making by setting up a Project Management Unit (PMU) to support contract management. It will ensure realistic setting of General Staff Qualitative Requirements of weapons/platforms and overhaul trial and testing procedures, FM announced.
Civil aviation: Airspace management, Public-Private Partnership in Airports and MRO hubs
Finance Minister said that only about 60% of Indian airspace is freely available, which meant, airlines usually fly longer routes. To help rationalise this, FM Sitharaman said restrictions on utilisation of Indian air space will be eased so that civilian flying becomes more efficient.
This will bring a total benefit of Rs 1000 crore a year for the aviation sector. This will also reduce fuel use and time, leading to a positive environmental impact, the FM added.
PPP in Airports
The government has announced six more airports for auction under a PPE model. Additional investments likely to happen in 12 airports for better world-class facilities, the Modi government notified.
The Finance Minister announced that Airport Authorities of India will get down payment of Rs 2,300 crore. She added that the first and second round of investment in 12 airports will get Rs 13,000 crore. Another six airports will be put out for the third round of bidding.
Maintenance, Repair and Overhaul (MRO)
India has the capacity – manpower and skills, it can be a hub for many flights heading to South-East Asia and westwards, the Finance Minister said.
The Modi government also announced that tax regime for MRO ecosystem has been rationalised. Maintenance cost of airlines will come down.
Discoms in Union Territories
The power distribution companies in UTs shall be privatised, the centre announced. The privatisation will be in line with tariff policy which is soon to be announced. DISCOM inefficiencies will not burden consumers, the FM clarified.
The government will release a tariff policy with reforms, including consumer rights, promotion of industry and sustainability of sector.
Social infrastructure projects
The government says it will boost private sector investments in social-infrastructure projects, like hospitals, by revamping the Viability Gap Funding Scheme.
For the creation of such projects, the Modi government has made a provision of Rs 8,100 crore which will be in the form of viability gap funding. Through this we expect to meet the urgent requirement for social infrastructure in the country, the Finance Minister said.
For other sectors, VGP existing support of 20% each from GoI and States/Statutory Bodies shall continue. These projects to be proposed by Central Ministries/State governments and statutory entities, the FM added.
The government is boosting private participation in space activities, said Minister Sitharaman.
“India has ISRO, which has brought a lot of laurels. However, the private sector also doing a lot of work in the arena now. We want the Indian private sector to be a co-traveller in India’s space sector journey. Will provide a level playing field for private companies in satellites, launches, space-based services,” said Finance Minister added.
The government added that liberal geospatial data policy will be brought for providing remote-sensing data to tech-entrepreneurs. The government will provide a predictable policy and regulatory environment to private players. They will be allowed to use ISRO facilities and other relevant assets to improve their capacities.
Private sector will be allowed to use ISRO facilities and other relevant assets to improve their capabilities, FM Sitharman added.
Finance Minister Nirmala Sitharaman said that there shall be a research reactor in the public-private partnership (PPP) model to be established for the production of medical isotopes.
The Modi government also announced that it will be establishing facilities in PPP mode to use irradiation technology for food preservation, to complement agricultural reforms and assist farmers.
“To link India’s robust startup ecosystem to the nuclear system, technology development cum incubation centres will be set up. These will foster synergy between research facilities and tech entrepreneurs,” the Finance Minister added.
‘Atmanirbhar Bharat Abhiyan’ – A mission for self-reliance
In his fifth address to the nation over the Coronavirus pandemic, on Tuesday Prime Minister Narendra Modi announced an economic package under ‘Atmanirbhar Bharat Abhiyan’ amounting Rs 20 lakh crore to revamp the economy which is facing a serious crisis due to the Chinese epidemic. The economic package includes the recent announcements made by the government and the Reserve Bank of India on supporting key sectors of the country.
In his speech, PM Modi said the economic package would be around the 10 per cent of the GDP.
“I announce a special economic package today. This will play an important role in the ‘Atmanirbhar Bharat Abhiyan’. The announcements made by the government on coronavirus, decisions of RBI and today’s package totals to Rs 20 lakh crore. This is 10 per cent of India’s GDP,” PM Narendra Modi said.
The Prime Minister also said the package would help every section of society, including workers, farmers, the middle class, industrial units and the MSME sector.
The stimulus will play an important role in the ‘Atmanirbhar Bharat Abhiyan’ (Self-reliant India Campaign), PM Modi said.
“India’s self-reliance will be based on five pillars — economy, infrastructure, technology-driven system, vibrant demography and demand. When India speaks of self-reliance, it does not advocate for a self-centred system. In India’s self-reliance there is a concern for the whole world’s happiness, cooperation and peace,” PM Modi said in his address.
In her first address, Finance Minister Nirmala Sitharaman had announced comprehensive relief measures on Wednesday to support various sectors including Micro, Small and Medium Enterprises, Discoms, NBFCs, Micro Insurance Institutions, etc.
In the first tranche, the Modi government had announced 16 included six measures for MSMEs, EPF, NBFCs and MFIs, discoms, contractors, real estate sector and had also put out some tax measures.
Later, on Thursday, Finance Minister Nirmala Sitharaman had declared the second tranche of the “Atmanirbhar Bharat Abhiyan” package that included relief measures to migrant workers, street vendors, housing, employment generation for tribals and small farmers.
Similarly, Finance Minister Nirmala Sitharaman and MoS Finance Anurag Thakur put out in the public regarding various relief measures in the third trance on Friday in which support measures were announced to on Agriculture and Allied Activities – fisheries, animal husbandry, dairy, etc. Some reforms pertaining to governance and administrative reforms were also announced.
FM Sitharaman will announce the fifth and final tranche on Sunday, 17th May 2020 at 11 AM.