Nirmala Sitharaman Live: Optimum utilisation of airspace to happen to save fuel cost, MRO hub to be set up

Nirmala Sitharaman Live: Optimum utilisation of airspace to happen to save fuel cost, MRO hub to be set up

   Kautilya Academy    16-05-2020

Union Finance Minister Nirmala Sitharaman will be unveiling the fourth tranche of Aatmanirbhar Bharat economic package today. What can we expect today? Stay tuned for live updates.

Union Finance Minister Nirmala Sitharaman has begun announcing the fourth tranche of Aatmanirbhar Bharat economic package. The FM highlighted how PM Modi had said earlier that India has to be ready for tough competition. Aatmanirbhar Bharat is not about looking inwards, it is not an isolationist policy but making India rely on its strengths and ready to face global challenges, reiterated Sitharaman. Hence, the FM stated the fourth tranche will be focused on structural reforms. 

Focus: Structural Reforms in New Sectors

The Finance Minister emphasised that the fourth tranche will focus on structural reforms in new sectors, where growth is possible and employment is generated.

Following 8 sectors will be the key focus:



Defence Production

Airspace management, Airports, MRO (Civil Aviation)

Power Distribution companies in Union Territories

Space- ISRO

1. Coal

Government will be bringing in commercial mining in coal sector on a revenue sharing basis. Government monopoly will be removed. Liberalised entries will be allowed for people to participate. India has the third largest valuable deposit of coal and we still import of coal and sometimes energy sectors suffer because of this. Hence, this requires regulation in the sector. We have abundant coal but we have been regulating and suffocating it. Coal is not environmently- we are conscious of that.

We will be giving incentives to successful bidders so that coal is converted into gas keeping in mind India's environment responsibilities, stated FM Sitharaman.  Coal bed methane extraction will happen through auctions. Government is allocating Rs 50,000 crores for evacuation infrastructure for the coal sector.

2. Minerals

A seamless composite exploration, mining, production regime to be set up for mining of minerals. 500 mining blocks will be offered through this open and transparent system. Joint auction of necessary tools will happen to increase the aluminium industry's competitiveness. Distinction between captive and non-captive mines to be removed. Remaining mining minerals can be transferred now. The Ministry of Mines is developing a Mineral Index. Stamp duty will also be rationalised.

3. Defence Production

We shall notify a list of weapons and arms that will not be imported but will be obtained from India. This list will be updated every year. Indigenisation of some imported spares will also be initiated. A separate budget provision will also be given for domestic procurement. This is bring down the import bill of the defence department. Indian producers of defence equipment will be promoted.

Improve the autonomy, accountability of ordinance supplies - we intend to corporatise ordinance factory boards. Corporatization of the ordinance factory boards is not same as privatisation. Ordinary indian citizens can also buy shares in them. This will make them more transparent for Indian citizens. 

FDI limits are being raised from 49 percent to 71 percent. 

-Mechanism for time-bound defence procurement process will be set up.

-Realistic setting for GSQR will be made. Some time unrealistic quality requirements are made.

4. Civil Aviation

-Airspace Management: 

Only 60 percent of Indian airspace is freely available. We may have been flying to certain destinations taking longer routes, informed FM Nirmala Sitharaman. Now optimum utilisation of the airspace will happen as it uses up more fuel and time.

The Government will rationalise the airspace- saving travel time,. fuel, pilots flying time. This is an environmental step that will have huge impact om India's fuel import bill. This will help save around Rs 1000 crore.


Six more airports are for auction- AAI will do it on a public- private basis. Six more airports have been identified for second round of bidding. Additional investment will also happen in 12 airports for better world class facilities. Major airports in India will become better- with better customer facilities. The first and second round of investments are expected to include Rs 130000 crores.

-MRO Hub 

Making India an MRO Hub-(Maintenancem, repair and overhaul or aircraft). This was being done abroad for both civil and defence aircraft. Hence, the government plans to create an MRO ecosystem in India. Civil and defence aircraft will also benefit from this. This will bring down the maintenance cost of all airlines, which will have a ripple effect on the passengers. 

5. Power Distribution in Union Territories

The Power Distribution in Union Territories will be privatised in line with a new Tariff policy, which will be announced soon. 

Past policy reforms to fast-track investments 

An empowered group of secretaries was formed to fast-track infrastructure investment. Project development cells were formed in each ministry to prepare investible projects in coordination with investors. The states are also being ranked on the basis of the attractiveness of their investment policies. Through this, the champion sectors will be promoted. 

FM highlights past reforms that are worth recalling:

•  DBT- The system has become very useful now.

•  GST- It brought in one nation and one market.

•  IBC

•  Steps India took for ease of doing business

•  Public Sector Bank Reforms

•  Direct Taxation Reforms

•  Power Sector Reforms

•  Coal Sector 

•  Water and Irrigation

11 Key Highlights from Nirmala Sitharaman’s Press Conference Day 3

The FM Nirmala Sitharaman's third tranche of announcements from the special economic package focused on agriculture, animal husbandry, fisheries, dairy sector and other allied activities. The Finance Minister announced 11 measures, out of which 8 were related to strengthening of infrastructure in agriculture and allied activities and 3 were related to governance and adminstrative reforms in agriculture. 

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