Boosting sagging economy


In bold reforms aimed at boosting sagging economy, the Government has announced an easing of limits on Foreign Direct Investment in defence manufacturing, privatisation of six more airports, opening up of more air space and allowing private sector in commercial coal mining. The list of weapons that cannot be imported will be expanded to give Make in India a boost. The private sector will also be involved in the Indian space programme including in future projects for planetary exploration and outer space travel as well as satellite launches. Announcing the fourth tranche of the economic stimulus package that largely dealt with reforms and almost negligible new investment, Finance Minister Nirmala Sitharaman said foreign investors would be allowed to own up to a 74 per cent stake in defence manufacturing ventures under the automatic route, up from the current 49 per cent limit. The Government will be expanding the list of weapons/ platforms banned for imports with year-wise timelines and indigenisation of some imported spares. To improve autonomy, accountability, and efficiency in ordnance supplies, the Government will Corporatise Ordnance Factory Board, which will ultimately lead to listing on domestic stock exchanges.
The Government of India has decided that six more airports will be bid out for operation and maintenance on public-private partnership (PPP) basis. Also, additional investment by private players in 12 airports bid out in the first two rounds is expected to be around Rs 13,000 crore. For the coal sector it has been announced allowing the private sector in commercial mining as well as auction of even partially explored coal blocks. Turning coal into liquid or gaseous fuel will be incentivised while rights to exploit of gas lying below coal bed (CBM) in blocks owned by state-owned Coal India Ltd (CIL) will be auctioned. The Government will also remove the distinction between captive and non-captive mines to allow the transfer of mining leases and the sale of surplus unused minerals, leading to better efficiency in mining and production. For the electricity sector, the Finance Minister said a tariff policy laying out consumer rights such as inefficiencies of distribution companies not burdening consumers and penalising load-shedding is on the anvil.

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