NEW DELHI, May 16 - In bold reforms aimed at boosting sagging economy, the government on Saturday 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.
Also, 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. This would be subject to security clearance norms, she said.
Also, the government will expand the list of weapons/platforms banned for imports with year-wise timelines and indigenisation of some imported spares. This, the minister said, would boost domestic manufacturing and cut huge defence import bill.
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. �Corporatisation is not privatisation,� she said.
The Finance Minister said 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.
She said more air space will be opened for civil aviation, helping airlines save Rs 1,000 crore in flying cost through reduced flying time and lower fuel consumption. Currently, only 60 per cent of the Indian air space is freely available.
Restrictions on the utilisation of the Indian air space will be eased in consultation with the Defence Ministry so that civilian flying becomes more efficient, she said.
Steps would also be taken to make the country a hub for maintenance, repair, and overhaul (MRO) of aircraft, she said, adding a tax on MRO operations had already been cut in March.
For the coal sector, she announced allowing the private sector in commercial mining as well as auction of even partially explored coal blocks. Also, turning coal into liquid or gaseous fuel will be incentivised, while rights to exploit of gas lying below coal bed in blocks owned by state-owned Coal India Limited will be auctioned.
Sitharaman announced structural reforms in the mining of minerals through the introduction of a seamless composite exploration-cum-mining-cum-production regime under which 500 mining blocks would 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 minister said a tariff policy laying out consumer rights such as inefficiencies of distribution companies not burdening consumers and penalising loadshedding is on the anvil. The policy will promote progressive reduction in cross-subsidies.
For boosting private sector investment in social infrastructure, a Rs 8,100-crore revamped viability gap funding scheme will be launched by raising the share of government funds in such projects to 30 per cent from the current 20 per cent.
Sitharaman said for boosting private participation in space activities, the government will provide a level playing field for private companies in satellites, launches and space-based services. The private sector will be allowed to use ISRO facilities and other relevant assets to improve their capacities.
In atomic energy, a research reactor in PPP mode for the production of medical isotopes that can be used for affordable treatment for cancer and other diseases will be established. � PTI
H i g h l i g h t s
� FDI in defence manufacturing to be hiked to 74 per cent
� List of weapons/platforms banned for imports to be notified � such items can only be purchased from India
� Indigenisation of imported spares to be promoted, focus on lowering defence import bill
� Faster decision making in defence procurement
� Ordnance Factory Board to be corporatised
� Restrictions on utilisation of Indian air space to be eased for increasing efficiency of passenger aircraft
� Six more airports to be privatised
� India to become a global hub for aircraft maintenance, repair and overhaul
Coal and mineral
� Commercial mining in coal sector to be introduced
� Entry norms to be liberalized, nearly 50 blocks to be offered immediately
� Rs 50,000 crore earmarked for infrastructure development in coal sector
� Reform in tariff policy, privatisation of Discoms in Union Territories
� Private sector to be allowed in satellites, launches and space-based services
� Private sector will be allowed to use ISRO facilities
� Research reactor to be set up in PPP mode for the production of medical isotopes