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FM Sitharaman’s fourth tranche : Rs. 50,000 crore for coal infrastructure to hike in FDI limit in defence manufacturing

In the fourth tranche of announcement on Rs. 20 lakh crore ‘Atma Nirbhar Bhara’ economic package, Union Finance Minister Nirmala Sithraraman on Saturday announced structural reforms for eight sectors including Rs. 50,000 crore investment for coal infrastructure and relaxed FDI rules for defence manufacturing.

In a press conference held in New Delhi, the finance minister said that many sectors need policy simplification, to make it simpler for people to understand what sector can give, participate in activities & bring transparency.

Outlining the need for Policy reforms to fast track investments and the steps taken by the Government, Sitharaman 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 Finance Minister announced the following structural reforms in the eight sectors of Coal, Minerals, Defence production, Civil Aviation, Power Sector, Social Infrastructure, Space and Atomic energy :


A. Introduction of Commercial Mining in Coal Sector :

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.

B. Diversified Opportunities in Coal Sector :

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.

C. Liberalised Regime in Coal Sector :

Coal Bed Methane (CBM) extraction rights will be auctioned from Coal India Limited’s (CIL) coal mines.


A. Enhancing Private Investments in the Mineral Sector :

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.

B. Policy reforms in Mineral Sector

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.


Enhancing Self Reliance in Defence Production 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.

Policy Reforms in Defence Production :

FDI limit in the Defence manufacturing under automatic route will be raised from 49% to 74%.

There will be time-bound defence procurement process and faster decision making will be ushered in by setting up of a Project Management Unit (PMU) to support contract management; Realistic setting of General Staff Qualitative Requirements (GSQRs) of weapons/platforms and overhauling Trial and Testing procedures.


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.

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.

India to become a global hub for Aircraft Maintenance, Repair and Overhaul (MRO) : Aircraft component repairs and airframe maintenance to increase from Rs 800 crore to Rs 2,000 crore in three years. It is expected that major engine manufacturers in the world would set up engine repair facilities in India in the coming year.


A. Tariff Policy Reform

Tariff Policy laying out the following reforms will be released:

(i) Consumer Rights:

DISCOM inefficiencies not to burden consumers
Standards of Service and associated penalties for DISCOMs
DISCOMs to ensure adequate power; load-shedding to be penalized

(ii) Promote Industry

Progressive reduction in cross subsidies
Time bound grant of open access
Generation and transmission project developers to be selected competitively

(iii) Sustainability of Sector

No Regulatory Assets
Timely payment of Gencos
DBT for subsidy; Smart prepaid meters

B. Privatization of Distribution in UTs

Power Departments / Utilities in Union Territories will be privatised. This will lead to better service to consumers and improvement in operational and financial efficiency in Distribution. This will also provide a model for emulation by other Utilities across the country.


The Government will enhance the quantum of Viability Gap Funding (VGF) upto 30% each of Total Project Cost as VGF by the Centre and State/Statutory Bodies. For other sectors, VGF existing support of 20 % each from Government of India and States/Statutory Bodies shall continue. Total outlay is Rs. 8,100 crore. Projects shall be proposed by Central Ministries/ State Government/ Statutory entities.


There shall be level playing field provided to private companies in satellites, launches and space-based services. Predictable policy and regulatory environment to private players will be provided. Private sector will be allowed to use ISRO facilities and other relevant assets to improve their capacities. Future projects for planetary exploration, outer space travel etc shall also be open for private sector. There will be liberal geo-spatial data policy for providing remote-sensing data to tech-entrepreneurs.


Research reactor in PPP mode for production of medical isotopes shall be established to promote welfare of humanity through affordable treatment for cancer and other diseases. Facilities in PPP mode to use irradiation technology for food preservation – to compliment agricultural reforms and assist farmers shall also be established. India’s robust start-up ecosystem will be linked to nuclear sector and for this, Technology Development-cum-Incubation Centres will be set up for fostering synergy between research facilities and tech-entrepreneurs.

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