The Union Finance Minister recently unveiled the fourth tranche of the Atmanirbhar Bharat Abhiyan, aimed at fast-track investments across eight key sectors. Part of the 20 lakh crore economic stimulus package designed to tackle the Covid-19 pandemic, the measures encompass coal, minerals, defence production, civil aviation, power distribution, social infrastructure, space, and atomic energy.
Policy Reforms for Fast-Track Investments
To expedite investment clearance, an Empowered Group of Secretaries will be utilized. Project Development Cells will be established in every Ministry to facilitate the coordination between investors and Central/State Governments. States will be ranked according to investment attractiveness to foster healthy competition. Additionally, incentive schemes will be introduced to promote emerging sectors such as solar PV manufacturing and advanced cell battery storage.
Coal Sector: A New Chapter in Commercial Mining
The latest reforms will mark the end of government monopoly in coal mining. Commercial mining will be introduced based on a revenue-sharing mechanism. The government aims to reduce the environmental impact by incentivizing Coal Gasification/Liquefaction through rebates. Infrastructure development worth Rs. 50,000 crores is to be undertaken to achieve Coal India Limited’s target of 1 billion tons coal production by 2023-24.
Mineral Sector: Enhancing Production and Efficiency
As part of the composite regime, 500 mining blocks will be auctioned transparently. The government plans to abolish the distinction between captive and non-captive mines leading to improved efficiency in mining and production.
Defence Sector: Bolstering Domestic Manufacturing
The FDI limit in defence manufacturing is to be raised from 49% to 74%. The government will set up a Project Management Unit to expedite defence procurement and decision-making while reducing the defence import bill.
Civil Aviation: Promoting Efficiency and Infrastructure Development
The government plans to ease the restrictions on Indian airspace utilization to ensure more efficient civil aviation. Benevolent efforts include airport development through the Public-Private-Partnership model and fostering India as a global hub for aircraft maintenance, repair, and overhaul.
Power Distribution Sector: Towards a Consumer-Centric Approach
Future tariff policy reforms aim to focus on consumer rights, industry promotion, and sector sustainability. The power departments/utilities in Union Territories are slated for privatization to enhance operational and financial efficiency in distribution.
Social Infrastructure Projects: Boosting Investments through Viability Gap Funding
The government will invest Rs 8,100 crores through Viability Gap Funding (VGF). The Centre aims to increase its share in VGF to 30% in the future, encouraging sustainable projects proposed by Central Ministries, State Government, or Statutory entities.
Space Sector: Encouraging Private Participation
The government is set to provide a level playing field for private companies in space-related initiatives. Private players will be allowed to use ISRO’s facilities and other relevant assets to improve their capabilities. A liberal geo-spatial data policy will also be introduced providing remote-sensing data to tech-entrepreneurs.
Atomic Energy: Advancements for Affordable Treatment and Food Preservation
A research reactor in PPP mode will produce medical isotopes for affordable cancer treatment and other diseases. It will also generate facilities to use irradiation technology for food preservation.
The new measures have, however, drawn some criticism for being more focused on industrial reforms rather than stimulating immediate relief from the pandemic induced economic downturn. Critics argue that the direct budgetary impact of these measures is limited to the Rs 8,100 crores raised through viability gap funding for social sector infrastructure, and that the measures do not address the immediate need for economic revival post-lockdown.
