FM Sitharaman Highlights: Cheaper air travel, higher defence FDI, commercial coal mining among major reforms

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Updated: May 16, 2020 8:25:25 pm

Nirmala Sitharaman press conference HIGHLIGHTS: Defence production, coal mining and minerals production are the sectors that have got a major liberalization boost today as the government put major structural growth reforms on the agenda today. FM Sitharaman continues to roll out Prime Minister Narendra Modi’s Rs 20 lakh crore special economic package for the fourth day in a row.

Live Press Conference by FM Nirmala SitharamanPress Conference by FM Nirmala Sitharaman Live updated

Nirmala Sitharaman press conference HIGHLIGHTS: Structural policy reforms in growth-oriented sectors was the key highlight of today’s reforms rollout as government liberalised crucial sectors for more investment, higher production and more jobs opportunities. FM Sitharaman in her address clarified that Atma Nirbhar Bharat Abhiyan is not about making India isolated. Today, the government announced reforms for eight sectors – coal, minerals, defence production, air space management, airports, MRO, distribution companies in UTs, space sector, and atomic energy. FM announced to make the air travel cheaper and in an effort to make civilian flying more efficient, it announced to ease the restrictions on utilisation of the Indian Air Space. The government also announced the commercial mining in the coal sector and informed that the government’s monopoly will be removed to make coal available on market prices. Further, FM Sitharaman said that discoms in metros will be privatised and load shedding will face penal action. Discom functions will be streamlined so as to improve accountability. In an attempt to make India an Atmanirbhar economy in the space sector, the government will boost private participation in space activities. The government will also provide a predictable policy and regulatory environment to private players. The government will bring in policy reforms to fast-track investment; project development cell in each ministry to prepare investible projects, coordinate with investors and central/ state governments. Under upgradation of industrial infrastructure, the scheme will be implemented in states through challenge mode for Industrial Cluster Upgradation of common infrastructure facilities and connectivity. The government has increased the FDI limit in defence manufacturing under the automatic route from 49 per cent to 74 per cent.

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Highlights

    20:21 (IST)16 May 2020
    Liberalisation in fast forward mode

    FM's structural reforms announcements today take the policy of going "vocal about local" forward. Indigenization of imported spares, corporatization of Ordnance Factory Board & listing in the stock exchange are indeed bold structural reform measures. Raising the FDI limit in defence manufacturing will help in technology transfer and will be a major boost for domestic manufacturing. Auctioning of 6 more airports and privatisation of Discoms in UTs are welcome. In brief, liberalisation in fast forward mode: VK Vijayakumar- Chief Investment Strategist- Geojit Financial Services

    20:20 (IST)16 May 2020
    Measures on defence and space will lead to an uptick in stock prices of some companies

    These announcements are spread over multiple years and hence their immediate impact may again be limited. Fiscal impact also seems very small for the current fiscal. Some of these may require legislative approval, states’ cooperation and signal from judiciary about being quick in decision making and being fair to bidders/general businessmen. Also a lot of these measures need not have waited for Covid 19. Measures related to power generation and distribution and mining are welcome as they can make an impact fast if states get on board soon leaving aside their political compulsions. Measures on defence and space will lead to an uptick in stock prices of some companies for a few days but here again, one will have to watch as to how fast intent is converted into execution: Dhiraj Relli, MD & CEO, HDFC Securities

    20:19 (IST)16 May 2020
    All these reform measures announced today are positive for investment

    All these reform measures announced today are positive for investment which will be accrued over time and may not be in FY21 as banks may not like to lend to those who are already asking for moratorium: CARE Ratings

    20:18 (IST)16 May 2020
    Today’s announcement does breathe some life into the pandemic hit civil aviation sector

    Today’s announcement does breathe some life into the pandemic hit civil aviation sector, but no mention of bailouts on an immediate basis may attract mixed response from the industry. Though, easing curbs on airspace would certainly bring in long term efficiency and on an immediate basis some relief to the airlines, but a more meaningful intervention may be required if the aviation sector is not on the recovery path soon. The announcement on mixed use of MRO and rationalisation of tax regime for MRO ecosystem will be pivotal in incentivising the MRO business and unleashing its potential owing to India’s strategic location – great move: Ajay Sawhney, Partner, Cyril Amarchand Mangaldas

    19:28 (IST)16 May 2020
    Modi’s champion sectors to drive structural growth; states to compete for investment ranking

    Finance Minister Nirmala Sitharaman in the fourth tranche of measures of Rs 20 lakh crore special economic package, announced the policy reforms to fast-track investments, in Prime Minister Narendra Modi’s quest to make a nation self-reliant economic powerhouse. The government will identify new champion sectors to pump in more investments, which can then drive the country’s economic growth. In the last couple of months, the government formed an empowered group of secretaries (EGoS), which is now working on identifying project development areas, and forming project development cells in various ministries.

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    19:26 (IST)16 May 2020
    Govt monopoly on coal finally ends; Nirmala Sitharaman okays commercial mining, other benefits

    Finance Minister Nirmala Sitharaman today ended the government’s monopoly on coal by allowing commercial mining to introduce competition, transparency, and private sector participation through a revenue-sharing mechanism in the coal sector. In the fourth tranche of the announcement under the Atma-Nirbhar Bharat mission, FM Sitharaman removed the regime of fixed rupee/tonne pricing of coal. The Finance Minister added that the economy will benefit from the opening up of the coal sector.

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    18:35 (IST)16 May 2020
    Govt monopoly on coal finally ends

    Finance Minister Nirmala Sitharaman today ended the government’s monopoly on coal by allowing commercial mining to introduce competition, transparency, and private sector participation through a revenue-sharing mechanism in the coal sector. In the fourth tranche of the announcement under the Atma-Nirbhar Bharat mission, FM Sitharaman removed the regime of fixed rupee/tonne pricing of coal. Read full story here

    17:26 (IST)16 May 2020
    Soon, private players can too participate in space travel programmes

    Private players can also participate in programmes related to space travel - FM Sitharaman

    17:21 (IST)16 May 2020
    FM Sitharaman's address to be at 11 am tomorrow

    The last and the fifth tranche of the announcement to be held at 11 am

    17:15 (IST)16 May 2020
    Govt's measures to leave more cash in hands of people now

    Government is taking steps to leave more money in the hands of people now, which will boost demand - FM Sitharaman

    17:07 (IST)16 May 2020
    Research reactor for production of medical isotopes

    Government to establish a research reactor in the PPE model for the production of medical isotopes. India has earned a lot of goodwill from countries where India has exported them. - FM Sitharaman

    17:05 (IST)16 May 2020
    Private space tech cos can now use ISRO's facilities

    To provide private players with a level field, the government has allowed the private sector to use ISRO's facilities. The government has aimed to make predictable policy for private players to make them co-travellers for Atma Nirbhar Bharat - FM

    17:01 (IST)16 May 2020
    Government increases viability gap funding in social infrastructure

    Rs 8,100 crore outlay for viability gap funding in social infrastructure, by increasing the quantum from 20% to 30%. - FM Sitharaman 

    16:59 (IST)16 May 2020
    Stability in power sector

    Privatisation of the discoms will bring stability in the power sector. Will help timely payment too - FM

    16:55 (IST)16 May 2020
    Discoms in UTs privatised

    Power distribution companies in Union Territories will be privatised. Tariff will be applicable according to the government's guidelines - FM Sitharaman

    16:54 (IST)16 May 2020
    Up to Rs 2000 crore benefit for aviation sector

    Aviation sector to get benefit of Rs 800 crore to Rs 2,000 crore from aircraft maintenance and airframe repair in country from MRO hub. 

    16:52 (IST)16 May 2020
    Aviation sector to get benifit of Rs 1,000 crore from better utilisation of airports

    Utilisation of airspace will bring a total benefit of about Rs 1,000 crore per year for the aviation sector by reducing fuel use and time.

    16:49 (IST)16 May 2020
    Govt makes Indian airports better

    The government puts 6 more airports on auction, does additional investment in 12 airports for world-class facility.

    16:47 (IST)16 May 2020
    Govt takes steps for optimum utilisation of airspace

    Only about 60% of airspace is freely available. Optimum utilisation of airspace to reduce air distance and fuel consumption is necessary - FM

    16:44 (IST)16 May 2020
    Project management unit to support contract management in defence manufacturing

    The government aims to set up a project management unit to support contract management in defence manufacturing. Overhauling trial and testing procedures will also be available.

    16:41 (IST)16 May 2020
    FDI limit in defence manufacturing increased to 74%

    Government increases FDI limit in defence manufacturing under the automatic route from 49% to 74%. Also, time-bound defence procurement process and faster decision making will be ushered - FM Sitharaman

    16:39 (IST)16 May 2020
    Ordinance factory board to be corporatised

    Govt corporatise ordinance factory board, to be listed in stock markets. FM Sitharaman clarified that it will not be privatised. 

    16:39 (IST)16 May 2020
    Separate budget for domestic capital procurement of weapons

    A separate budget will be given for domestic capital procurement so that the armed forces can reduce the import bill - FM Sitharaman

    16:37 (IST)16 May 2020
    Govt puts restriction on imports of certain weapons

    We need to be self-reliant in the defence sector. High tech equipment can be imported but some of the weapons can be made in India. Certain weapons to be restricted from imports and can only be bought from India - FM Sitharaman

    16:34 (IST)16 May 2020
    Joint auction for bauxite and coal mineral blocks

    Bauxite and coal mineral blocks will be jointly auctioned to save electricity, boost employment, and develop state of art technology. 

    16:31 (IST)16 May 2020
    Sale of unused minerals allowed

    The government allows the sale of surplus and unused minerals by new mining lease facility. - FM

    16:30 (IST)16 May 2020
    Joint auction for mineral sector

    A seamless composite mining-cum-exploration-cum-production facility for the mineral sector.  500 mining blocks will be allocated for this and joint auction will take place - FM Sitharaman 

    16:27 (IST)16 May 2020
    New allotment for gasification from coal

    For gasification, new allotments will be done for new diversified investments. 

    16:26 (IST)16 May 2020
    Govt to allow nearly 50 coal blocks for auction

    Nearly 50 coal blocks will be available for auction in near future. Upfront payment ceiling will be applicable. 

    16:24 (IST)16 May 2020
    Govt to spend Rs 50,000 crore for coal evacuation infrastructure

    Coal bed methane extraction will be auctioned. Rs 50,000 crore will be spent by the government towards evacuation infrastructure. 

    16:22 (IST)16 May 2020
    Commercial mining allowed in coal sector

    FM Sitharaman brings commercial mining in the coal sector, the government's monopoly has been removed to make coal available on market prices.

    16:19 (IST)16 May 2020
    Govt to promote new champion sectors

    The fourth tranche of announcements will also include champion sectors and the incentive schemes for the promotion of new champion sectors will be launched in sectors such as solar PV manufacturing, advanced cell battery storage, etc.  

    16:17 (IST)16 May 2020
    Relief measures for eight sectors

    Govt to make major announcements for eight sectors - coal, minerals, defence production, air space management, airports, MRO, distribution companies in UTs, space sector, and atomic energy. 

    16:15 (IST)16 May 2020
    Upgradation of industrial infrastructure on cards today

    FM Sitharaman to talk about upgradation of industrial infrastructure today.

    16:13 (IST)16 May 2020
    Make in India to be a big contributor for Atma Nirbhar Bharat.

    The foundation of Make in India initiative was laid earlier will be a big contributor for Atma Nirbhar Bharat. - FM

    16:11 (IST)16 May 2020
    Today's announcement to be focussed on structural reforms in the sectors that are going to be the new horizon for growth

    Today's announcement to be focussed on structural reforms in the sectors that are going to be the new horizon for growth, more investment can be drawn, more production can be clearly marked, and certainly more employment opportunities can be generated in these sectors. - FM

    16:09 (IST)16 May 2020
    Structural reforms are focus of today’s announcement

    FM said structural reforms are focus of today’s announcement.

    16:09 (IST)16 May 2020
    FM recalls Modi govt's landmark structural reforms

    GST,  DBT, IBC, Ease of doing business, PSU banks reforms, and the direct tax changes, UDAY scheme have been landmark reforms - FM Sitharaman

    16:07 (IST)16 May 2020
    PM Modi's goal of self-reliant India is to prepare the country for tough competition

    FM said that PM Modi's goal of self-reliant India is to prepare the country for tough competition and face challenges of global value chains.

    16:06 (IST)16 May 2020
    Atma Nirbhar Bharat is not about making India isolated

    FM Sitharaman clarified that Atma Nirbhar Bharat is not about making India isolated. 

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