Power distribution cos in Union Territories to be privatised

Our Bureau New Delhi | Updated on May 16, 2020 Published on May 16, 2020

Finance Minister Nirmala Sitharaman   -  Kamal Narang

Structural reforms in coal, defence prod, aviation focus of the fourth tranche of economic package

Focused on eight sectors, the fourth tranche of the Rs 20 lakh crore ‘Atmanirbhar’ economic package saw announcement of several structural reforms in these sectors as part of efforts to boost investments and job creation in the Indian economy.

A large part of the new measures should be seen as Government’s new emphasis of developing ‘self reliant’ country, said economy watchers.

Notable structural reforms announced by the Finance Minister Nirmala Sitharaman in a more than hour long press conference include raising of Foreign Direct Investment limit under the automatic route in ‘defence production’ to 74 per cent from 49 per cent now; increased 30 per cent viability gap funding for social infrastructure projects such as hospitals with allocation of Rs 8,100 crore, corporatisation of ordinance factories; six more world class airports through PPP ( Rs 13,000 crore investments), developing India as global hub for MRO in aviation besides boosting private participation in space activities.

She also reiterated policy reforms in coal sector— commercial mining and focus on Coal Bed Methane Extraction for auction.

The eight sectors that got covered for the structural reforms are coal, minerals, defence production, aviation sector ( airspace management, MRO,), power distribution companies, space and atomic energy.

Sitharaman also announced that discoms in union territories will be privatised. To enhance self reliance in defence production, Sitharaman said that some ‘make in India’ initiatives for self reliance in defence production. She said that Government will notify a list of weapons/platforms for ban on import with year wise timelines.

There will be separate budget provisioning for domestic capital procurement and indigenisation of imported spares.This will help reduce huge defence import bill, according to Sitharaman. She also said that there would be efficient airspace management for civil aviation and restrictions on utilisation of the Indian air space will be eased.


  • FDI limit on defence production raised to 74 percent under automatic route.
  • Ordinance factories to be corporatised.
  • 6 more airports to be auctioned In the third round.
  • Make India global hub for MRO.
  • Power distribution companies in Union Territories to be privatised.
  • 30 per cent VGF in social infrastructure projects.
  • Private sector to get good access for space; boost private participation in space.
  •  allow private sector to use ISRO facilities.
  • Geo spatial data policy.
  • Atomic energy — establish facilities through PPP .
  • Seamless composite exploration-cum-mining-cum-production license.
  • Removing distinction between captive and non captive mines.
  • Bringing Commercial mining in the coal sector.
  • Coal bed methane extraction for auction.
  • Permitting transfer of mining lease.

PTI adds

Earlier this week, Prime Minister Narendra Modi announced a cumulative package of Rs 20 lakh crore, nearly 10 per cent of GDP, to provide relief to various segments of the economy battered by the nationwide lockdown in the wake of the coronavirus pandemic.

While this included March 27 announcement of Rs 1.7 lakh crore package of free foodgrain and cash to poor for three months and RBI’s Rs 5.6 lakh crore worth of monetary policy since March, the government in three tranches over the last three days announced a cumulative package of Rs 10.73 lakh crore.

The measures announced have largely been about liquidity with negligible extra budget spending.

The three tranches provided for a variety of steps for small businesses, street vendors, farmers and poor migrants as well as shadow banks and electricity distributors, but they have largely been either credit guarantee schemes or new fund creations to be shouldered by banks and financial institutions.

The government cash outgo is limited to a maximum of Rs 18,500 crore on free foodgrain and affordable housing to migrant workers as well as limited tax relief and marginal dole to some companies on employee retiral benefits.

Beginning March 25, India imposed a three-week-long nationwide lockdown, the most far-reaching measure undertaken by any government to curb the spread of the pandemic.

The lockdown, which brought most of the economic activities to a standstill as factories and businesses were shut while rendering thousands temporarily unemployed, has since been extended twice through May 17, with some relaxations to allow resumption of economic activities.

According to estimates, the lockdown may have led to 12.2 crore people losing jobs in April and consumer demand evaporating.

Published on May 16, 2020

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