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FM Announces Structural Reforms Across Eight Sectors To Boost Growth

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The Finance Minister announced structural reforms in the eight sectors of Coal, Minerals, Defence production, Civil Aviation, Power Sector, Social Infrastructure, Space and Atomic energy. She said that many sectors need policy simplification, to make it simpler for people to understand what sector can give, participate in activities & bring transparency. Once we decongest the sectors, we can boost the sector, for growth, the Finance Minister added. The Finance Minister further said that Prime Minister Shri Narendra Modi has very strong record in taking up deep systemic reforms citing Direct Benefit Transfer enabled giving money directly to people, GST brought in One Nation, One Market, Insolvency & Bankruptcy Code (IBC) resolved insolvency issues and steps taken for Ease of Doing Business.

Sitharaman outlined the need for Policy reforms to fast track investments and the steps taken by the Government in this regard. She stated that fast track clearance is being done through Empowered Group of Secretaries, 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 Government will introduce competition, transparency and private sector participation in the Coal Sector through a revenue sharing mechanism instead of regime of fixed Rupee/tonne. Any party can bid for a coal block and sell in the open market. Entry norms will be liberalised. There will be exploration-cum-production regime for partially explored blocks against earlier provision of auction of fully explored coal blocks. Production earlier than scheduled will be incentivized through rebate in revenue-share.

Coal Gasification / Liquefication will be incentivised through rebate in revenue share. This will result 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. This will include Rs 18,000 crore worth of investment in mechanised transfer of coal (conveyor belts) from mines to railway sidings. This measure will also help reduce environmental impact.

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 taken. This will allow for automatic 40% increase in annual production. Concessions in commercial terms given to CIL's consumers (relief worth Rs 5,000 crore offered). Reserve price in auctions for non-power consumers reduced, credit terms eased, and lifting period has been enhanced.

Meanwhile, enhancing private investments in the Mineral Sector, the FM said there will be 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, joint auction of Bauxite and Coal mineral blocks to enhance Aluminum Industry's competitiveness will be introduced to help Aluminum industry reduce electricity costs.

The distinction between captive and non-captive mines to allow transfer of mining leases and sale of surplus unused minerals, leading to better efficiency in mining and production shall be removed. Ministry of Mines is in the process of developing a Mineral Index for different minerals. There will be rationalisation of stamp duty payable at the time of award of mining leases.

Moreover, 'Make in India' for Self-Reliance in Defence Production will be promoted by notifying a list of weapons/platforms for ban on import with year wise timelines, Indigenisation of imported spares, and separate budget provisioning for domestic capital procurement. This will help reduce huge Defence import bill. FDI limit in the Defence manufacturing under automatic route will be raised from 49% to 74%.

Also, restrictions on utilisation of the Indian Air Space will be eased so that civilian flying becomes more efficient. This will bring a total benefit of about Rs 1,000 crore per year for the aviation sector. This will lead to optimal utilization of airspace; reduction in fuel use, time and will have positive environmental impact.

6 more airports have been identified for 2nd round bidding for Operation and Maintenance on Public-Private Partnership (PPP) basis. Additional Investment by private players in 12 airports in 1st and 2nd rounds is expected to bring around Rs. 13,000 crore. Another 6 airports will be put out for the third round of bidding. Also, India to become a global hub for Aircraft Maintenance, Repair and Overhaul (MRO).

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, May 18 2020. 08:40 IST
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