Finance Minister announces 8 long term reforms to attract FDI
The past week has been loaded with announcements towards reviving growth in the economy which has been stagnant for the past two months due to the COVID-19 pandemic. The Prime Minister of India earlier this week announced that a Rs. 20 lakh crore package has been planned for the stimulus package.
Following announcements made towards MSME, migrant labor, and agriculture today the Finance Minister Nirmala Sitharaman gave out 8 structural reforms towards attracting FDI. This includes sectors such as coal, minerals, civil aviation, atomic energy, and power distribution.
The measures include
- Announcement of commercial mining of coal by private players which will be done on revenue sharing purposes. It was also announced that 50 blocks will be offered for bidding and GOI will invest Rs. 50,000 crore towards infrastructure development.
- Auction of 500 blocks of minerals which will thus help the aluminum industry reduce electricity costs.
- Increasing the FDI limit for defense industries from existing 49 percent to 74 percent with restriction over the import of some weapons.
- Indigenization of imported spare parts and provision through a separate budget for domestic procurement in defense industries.
- Easing restriction for air usage for civil aviation industries which will benefit up to Rs.1000 crore per year. This will also help them reduce time and fuel costs.
- Auction of six more airports for private participation. Further Rs. 13000 crore will be made by private players for 12 airports through auction.
- Tax restructure for aircraft maintenance.
- Electricity production and distribution will be privatized in Union Territories (UT’s). This is supposed to improve efficiency the Finance Minister added.
- Rs. 8100 crore as Viability gap funding (VGF) for the development of social infrastructure.
- To Boost privatization in space activities, the government said it will provide a level playing field for private participants in space-based services. And also said the private sector will be allowed to use ISRO facilities for enhancing their capacities.
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