All you need to know: Fourth tranche of Centre's stimulus package

Union Finance Minister Nirmala Sitharaman on Saturday (May 16) announced the fourth tranche of the Centre’s economic stimulus package, which included a hike in foreign direct investment (FDI) limit in defence manufacturing and opening of the space sector for private participation.

Saturday’s announcements focused on structural reforms in sectors, where the finance minister said growth is possible and employment can be generated. The announcements focused on eights sectors: coal, minerals, defence production, airspace management, MROs, power distribution companies, space, and atomic energy.

Here’s a glimpse of the announcements made by the finance minister on Saturday:

• The government will introduce competition, transparency, and private sector participation in the coal sector through revenue sharing mechanism instead of the regime of fixed rupee/tonne. This will end government monopoly in the coal sector.
• Five hundred mining blocks would be offered through an open and transparent auction process, and a joint auction of bauxite and coal mineral blocks will be introduced to enhance aluminum industry’s competitiveness.
• FDI limit in defence manufacturing under automatic route will be raised from 49 per cent to 74 per cent. The Centre will notify a list of weapons/platforms banned for imports. Further, ordnance factory boards will be corporatised.
• Restrictions on the utilisation of Indian air space will be eased so that civilian flying becomes more efficient. Besides, six more airports will be auctioned for private participation.
• The government has plans to make India a global hub for Aircraft Maintenance, Repair and Overhaul (MRO). The tax regime for MRO ecosystem has been rationalised. Aircraft component repairs and air-frame maintenance will increase from ₹800 crore to ₹2,000 crore in three years.
• Power distribution companies (DISCOMs) in Union Territories will be privatised. A tariff policy that does not burden consumers with distribution companies’ inefficiencies will be guaranteed, said the finance minister.
• The government will boost private participation in the space sector, and provide level playing field to private companies in satellites, launches and space-based services. Future projects for planetary exploration, outer space travel will be open for private sector.
• The government will establish research reactors under PPP mode for production of medical isotopes to promote welfare of humanity through affordable treatment for cancer and other diseases. It will also link the country’s start-up ecosystem to the nuclear sector.

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