This came as part of the fourth tranche of announcements made by the Finance Minister under the Rs 20-lakh crore economic relief.

Nirmala Sitharaman at the fourth press conference of COVID relief
Money Coronavirus Saturday, May 16, 2020 - 20:14

In the fourth tranche of announcements, Finance Minister Nirmala Sitharaman announced a set of structural reforms across sectors such as aviation, defence, coal, minerals, among others. 

In a bid to make the utilisation of Indian airspace more optimal, reduce fuel usage and travel time, the FM said that restrictions on utilisation of Indian air space will be eased, making civilian flying more efficient and have a huge impact on the government’s fuel import bill. Currently, only 60% of India’s airspace is allowed for use. 

The FM said that this will bring a total benefit of about Rs 1000 crore per year for aviation.

The FM also announced that six more airports will be put up for auction on a public-private-partnership (PPP) basis. This comes after the government identified 12 airports for privatisation. 

"An additional investment of Rs 13,000 crore will be made by private players in 12 airports auctioned in first and second rounds,” the FM added. 

This comes after the Airports Authority of India (AAI) recommended to the Central government in December 2019 to privatise six more airports - Amritsar, Varanasi, Bhubaneswar, Indore, Raipur and Trichy.

The FM also announced that the country will be made a hub for Maintenance, Repair and Overhaul (MRO) so that airlines do not have to go abroad for the same. This, she said, will bring down maintenance costs for airlines. However, this is something the FM indicated in the past as well, during her budget speech in July 2019.  She said during her speech that the government will adopt suitable policy intervention to create a congenial atmosphere for development of MRO in the country to leverage India’s engineering advantage and potential to achieve self in the aviation sector.

She also said that major engine manufacturers from across the globe would set up engine repair facilities in India in the coming year.

Defence

The government has raised the Foreign Direct Investment limits in defence manufacturing under automatic route from 49% to 74%.

In a bid to promote Make in India and self-reliance in defence production, the FM said that the government will ban the import of some weapons/platforms that can be produced in India, and meet general staff qualitative requirement (GSQR) standards. The government will notify a list of weapons/platforms for ban on import with year wise timelines, which will be regularly updated

Space

Taking a note that the private sector too, apart from ISRO, is making strides in the space sector in India, the FM said that the government intends to provide a level playing field for private companies and startups in satellites, launches and space-based services.

Future projects for planetary exploration, outer space travel which was so far restricted to ISRO, will be open for the private sector too.

The private sector will also be allowed to use ISRO facilities and other relevant assets for testing and to improve capacities.

Coal

The FM announced that the government monopoly from the coal sector will be removed and that commercial mining will be allowed in the coal sector on a revenue sharing basis. She said that the government will introduce competition, transparency and private sector participation in the coal sector.

With this, any private player can bid for a coal block and sell it in the open market. The government has liberalised entry norms. Nearly 50 blocks will be offered. There will not be any eligibility conditions, only upfront payment.

“Regulations are required when there is a shortage, but India has an abundance of coal,” the FM said.

She said that there will be incentives to convert coal into gas to ensure environmental commitments are honoured. Rs 50,000 crore spent by govt to create evacuation infrastructure to help mined coal to be evacuated and transported. 

However, the coal sector was opened up in January itself when the Union Cabinet on approved an Ordinance to make the process of auctioning coal mines easier. The Coal Minister said at the time that the government plans to promote FDI in the sector by removing restrictions abd eligibility criteria in coal block auctions. 

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