The Prime Minister, Narendra Modi, in his national address had shared his vision of improving the livelihood of people, after covid19 lockdown.He revealed the strategy of ‘Aatmanirbhar Bharat’ (Self Reliant India) that will focus on making India self-reliant.
The first set of relief measures under the government’s ‘Atmanirbhar Bharat Abhiyan’—India’s Rs.20 lakh crore Covid-19 economic package was announced by Finance Minister Nirmala Sitharaman on May 16, 2020.
Atmanirbhar Bharat Economic Package Set 1 Highlights: Businesses and MSME [PDF download]
Atmanirbhar Bharat Economic Package Set 2 Highlights [PDF download]
Atmanirbhar Bharat Economic Package Set 3: Highlights [PDF download]
Focus areas: Structural reforms in coal, minerals, defence production, airports and airspace management, MRO, power distribution of companies in UTs, space and atomic energy.
Policy Reforms to fast track Investments: The Finance Minister expanded on the proposed policy reforms to attract and fast track investments in an effort towards Aatma Nirbhar Bharat:
- Investment clearance will be fast tracked through an Empowered Group of Secretaries.
- A Project Development Cell will be constituted in each Ministry to prepare investible projects, coordinate with investors and Central/State Governments.
- States would be ranked based 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.
- A scheme will be implemented in States through challenge mode for Industrial Cluster Upgradation of common infrastructure facilities and connectivity.
- There will be availability of industrial land/land banks to promote new investments and make information available on Industrial Information System (IIS) with GIS mapping.
- All Industrial Parks will be ranked during 2020-21.
Introduction of Commercial Mining in Coal Sector
The Government, inorder to reduce import of coal increase self-reliance in coal production, will introduce competition, transparency and private sector participation in the Coal Sector:
- A revenue sharing mechanism instead of regime of fixed Rupee/tone will be introduced. Any party can bid for a coal block and sell in the open market.
- Entry norms will be liberalized.Through this process, there will not be any eligibility conditions, only upfront payment with a ceiling will be provided. Nearly 50 Blocks will be offered immediately.
- There will be an exploration-cum-production regime for partially explored blocks against the earlier provision of auction of fully explored coal blocks paving way for private sector participation in exploration.
- Production earlier than scheduled will be incentivized through rebate in revenue-share.
Diversified Opportunities in Coal Sector
To open the sector and create more revenue opportunities, new schemes are to be launched.
- Coal Gasification/ Liquefication will be incentivised through rebate in revenue share resulting in significantly lower environment impact and also assist India in switching to a gas-based economy.
- Infrastructure development of Rs. 50,000 crore will be done for evacuation of enhanced Coal India Limited’s (CIL) target of 1 billion tons coal production by 2023-24 plus coal production from private blocks.
Liberalised Regime in Coal Sector
- Coal Bed Methane (CBM) extraction rights will be auctioned from Coal India Limited’s (CIL) coal mines.
- Ease of Doing Business measures, such as Mining Plan simplification, will be followed allowing an automatic 40% increase in annual production.
Enhancing Private Investments in the Mineral Sector
The union government intends to boost growth, employment and bring state-of-the-art technology especially in minerals 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.
- Joint auction of bauxite and coal mineral blocks would be introduced, to enhance aluminum Industry’s competitiveness.
Policy reforms in Mineral Sector
- Ministry of Mines is in the process of developing a Mineral Index for different minerals.
- To allow transfer of mining leases and sale of surplus unused minerals, leading to better efficiency in mining and production the distinction between captive and non-captive mines would be removed.
- Rationalisation of stamp duty payable at the time of award of mining leases.
Enhancing Self Reliance in Defence Production
Self-Reliance in Defence Production through ‘Make in India’ strategy is planned for implementation to help reduce the huge defence import bill.To facilitate this, a separate budget provisioning for domestic capital procurement shall be in place.
The autonomy, accountability and efficiency in ordance supplies are to be improved by Corporatisation of Ordnance Factory Board.
Policy Reforms in Defence Production
The 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 in place by setting up of a Project Management Unit (PMU) to support contract management; Realistic setting of General Staff Qualitative Requirements (GSQRs) of weapons/platforms and overhauling Trial and Testing procedures.
Efficient Airspace Management for Civil Aviation
The restrictions on utilisation of the Indian Air Space, where only 60% is freely available, will be eased. This measure will make civilian flying become more efficient.
It is expected to bring a total benefit of about Rs 1000 crore per year for the aviation sector. Also, it will lead to optimal utilization of airspace, reduction in fuel use, time and have a positive environmental impact.
More World-Class Airports through Public Private Partnership (PPP)
Airports Authority of India (AAI) has awarded 3 airports for operation and maintenance on Public-Private Partnership (PPP) basis.
For the 2nd round, 6 more airports have been identified, for which the bidding process shall start immediately.The 3rd round will be held for another 6 airports.
The private players in 12 airports in 1st and 2nd rounds are expected to bring in additional investment of around Rs. 13,000 crore.
India to become a global hub for Aircraft Maintenance, Repair and Overhaul (MRO)
It is expected that major engine manufacturers in the world would set up engine repair facilities in India in the coming year.
With the rationalization of tax regime for MRO ecosystem and revenue from aircraft component repairs to increase from Rs 800 crore to Rs 2,000 crore in three years.
The convergence between Defence sector and the civil MROs will be established to create economies of scale leading to cost reduction of maintenance cost of airlines.
Tariff Policy Reform in Power Sector
The central government shall soon release a tariff policy laying out the reforms related to consumer rights, industry promotion and sustainability of sector.
Privatization of Distribution in UTs
The power departments/ utilities in Union Territories (UT) will be privatized.It will lead to better service to consumers and improvement in operational and financial efficiency in Distribution. This will also provide a model for emulation by other utilities across the country.
Social Infrastructure: Boosting Private Sector Investment Through Revamped Viability Gap Funding Scheme
As social infrastructure projects suffer from poor viability, the government will enhance the quantum of Viability Gap Funding (VGF) upto 30% each of Total Project Cost as VGF by the Centre and State/Statutory Bodies.
For other sectors, VGF existing support of 20 % each from Government of India and States/Statutory Bodies shall continue.
The total outlay for this scheme is Rs.8100 crore and projects shall be proposed by Central Ministries/ State Government/ Statutory entities.
Boosting Private Participation In Space Activities
The Indian private sector companies will now be able to participate in India’s space sector, including projects related to planetary exploration, outer space travel etc. They will also be allowed to use ISRO facilities and other relevant assets to improve their capacities.
A level playing field would be provided to private companies in satellites, launches and space-based services, in addition to predictable policy and regulatory environment.
A liberal geo-spatial data policy will be put in place, for providing remote-sensing data to tech-entrepreneurs.
Atomic Energy Related Reforms
A research reactor in PPP mode for production of medical isotopes shall be established to promote welfare of humanity through affordable treatment for cancer and other diseases.
Facilities in PPP mode will be established to use irradiation technology for food preservation – to compliment agricultural reforms and assist farmers.
India’s robust start-up ecosystem will be linked to nuclear sector. To facilitiate this, Technology Development-cum-Incubation Centres will be set up for fostering synergy between research facilities and tech-entrepreneurs.
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