Economic Stimulus-IV – Economics – Free PDF Download

• Fourth tranche of Atmanirbhar Bharat Abhiyan
• Targeted towards fast track investments in the eight sectors.

DETAILS

• Focuses on eight sectors- coal, minerals, defence production, civil aviation, power distribution, social infrastructure, space and atomic energy.
• Part of the Rs. 20 lakh crore economic stimulus package to deal with the Covid-19 pandemic.

Basis of Policy Reforms for Fast-track Investments

• Fast tracking of investment clearance through the Empowered Group of Secretaries.
• Establishment of Project Development Cell in each Ministry to prepare a list of investable projects and also to coordinate with investors and Central/State Governments.
• Ranking of States on investment attractiveness to compete for new investment.
• Incentive schemes for promotion of new champion sectors such as solar PhotoVoltaic (PV) manufacturing; advanced cell battery storage etc.

Coal Sector:

• Introduction of commercial mining
• Will remove the government monopoly in coal mining.
• India has the third-largest coal availability within its untapped mines and yet India still imports coal.
• Commercial mining will be introduced on the basis of a revenue-sharing mechanism.
• The government will receive a share of the gross revenue from the sale of coal but will not be involved with the cost incurred.
• Coal Gasification/Liquefaction
• It will be incentivised through rebate (partial refund) in revenue share
• To lower the environmental impact.
• Expected to assist India in switching to a gas-based economy.
• Infrastructure Investment
• Worth of Rs. 50,000 crores
• To achieve the Coal India Limited’s (CIL) target of 1 billion tons coal production by 2023-24 plus coal production from private blocks.
• Coal Bed Methane (CBM) Extraction
• Extraction rights to be auctioned from Coal India Limited’s (CIL) coal mines.
• Mining Plan Simplification
• Ease of Doing Business
• It is expected to increase annual production by 40%.

Mineral Sector

• Exploration-cum-Mining-cum-Production Regime
• 500 mining blocks would be offered through an open and transparent auction process under this composite regime.
• Joint Auction of Bauxite and Coal Mineral Blocks
• Aims to enhance the aluminium industry’s competitiveness by reducing the cost of electricity generation.
• Remove the distinction between captive and non-captive mines
• Allow the transfer of mining leases and the sale of surplus unused minerals, leading to better efficiency in mining and production.
• The captive mines are that produce minerals for use by the same company.

Defence Sector

• The FDI limit in defence manufacturing under automatic route will be raised from 49% to 74%.
• The government will notify a list of weapons/platforms banned for imports and thus such items can only be purchased from India.

Civil Aviation

• The restrictions on the utilisation of Indian airspace will be eased- flying of civilian aircraft becomes more efficient.
• Optimal utilization of airspace, reduction in fuel use, time and will have positive environmental impact.
• Currently, only 60% of India’s airspace is freely available and thus airplanes have been flying to most destinations through longer routes hence more fuel is used in the process and the customers end up paying more.
• In addition to the existing ones,six more airports will be auctioned under the Public-Private-Partnership (PPP) model for its development.

Power Distribution Sector

• Tariff policy reforms will be announced
• Expected to focus on the consumer rights, promotion of industry and sustainability of the sector.
• The power departments/utilities in Union Territories will be privatised.
• It is expected to improve the operational and financial efficiency in Distribution.
• The government is expected to invest Rs 8,100 crores through Viability Gap Funding (VGF).
• Viability Gap Funding (VGF) – grant, one-time or deferred
• Provided to support infrastructure projects that are economically justified but fall short of financial viability.
• The lack of financial viability usually arises from long gestation periods and the inability to increase user charges to commercial levels.
• Currently, most of the projects are supported by centre/states/statutory bodies with 20% as VGF.
• But the Centre will be increasing its share in VGF to 30% in the future.

Space Sector

• Provide a level playing field for private companies in satellites, planetary exploration, outer space travel, launches and space-based services.
• Private players will also be allowed to use ISRO’s facilities and other relevant assets to improve their capabilities.
• Liberal geo-spatial data policy for providing remote-sensing data to tech-entrepreneurs.

Atomic Energy

• Research Reactor in PPP Mode:
• Help to produce medical isotopes for affordable treatment of cancer and other diseases.
• Generate facilities to use irradiation technology for food preservation.
• This will complement agricultural reforms and assist farmers.

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