Now, fourth tranche of Nirmala Sitharaman's stimulus plan as India preps for lockdown 4.0

Now, fourth tranche of Nirmala Sitharaman's stimulus plan as India preps for lockdown 4.0
Finance Minister Nirmala Sitharaman addresses a press conference on the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi in his address to the nation earlier this week, at National Media Center in New Delhi on May 15, 2020.IANS
  • The Finance Minister of India unveiled the fourth tranche of the government plan to revive the economy.
  • The announcements come amidst a broader anxiety over the plan for the next phases, which netizens are calling lockdown 4.0, beyond May 17 when the current lockdown is scheduled to end.
  • Today's measures will focus on structural reforms to attract more investments, more production, and more employment.
  • Get the latest news and updates on the unravelling COVID-19 crisis on Business Insider.
The Finance Minister of India, Nirmala Sitharaman, unveiled the fourth tranche of the government plan to revive the economy from the COVID-19 crisis. The announcements come with less than 48 hours for the the current lockdown to end and people were anxious about the next phase, which the netizens are calling lockdown 4.0 for now.

The first, second, and third tranche of the ₹20 lakh crore ($270 billion) economic stimulus promised by Prime Minister Narendra Modi focussed on a wide range of sectors from micro, small and medium (MSME) businesses, non-banking financial companies, farming and allied activities including fisheries and animal husbandry, and migrant workers among others.

Some of these steps included steps already announced as well as expansion of existing outlays.

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These are the top highlights from Sitharaman's speech on May 16:

Today's measures will focus on structural reforms to attract more investments, more production, and more employment. Reforms will focus on coal, minerals, defence production, civil aviation, power distribution in Union Territories, space, and atomic energy.
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1. ₹50,000 crore will be given to build coal evacuation infrastructure. Government will introduce competition, transparency and private sector participation in the coal sector through:

  • Revenue sharing mechanism instead of regime of fixed ₹/tonne.
  • Earlier, only captive consumers with end-use ownership could bid. Now, any party can bid for a coal block and sell in the open market.
  • Entry norms will be liberalised, and nearly 50 blocks will be offered immediately.
  • No eligibility conditions, only upfront payment with a ceiling.
2. A seamless, comprehensive exploration-mining-production policy will be introduced for non-coal minerals like iron ore, bauxite etc. 500 mining blocks would be offered through an open and transparent auction process. Joint auction of bauxite and coal will take place to enhance the competitiveness of the aluminium industry. The distiction between captive and non-captive mines and that will help transfer mining leases and the sale of unused minerals. Companies will be allowed to transfer the mining lease. The Ministry of Mines is in the process of mineral index. Stamp duties will be rationalised at the time of auction.

3. India will manufacture more defence equipment in India. The ordinance factories will corporatised (not privatised). The limit on foreign investment in defence manufacturing has been raised to 74% from 49%. Other measures include:
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  • Notify a list of weapons/platforms for ban on import with year-wise timelines.
  • Indigenisation of imported spares.
  • Separate budget provisioning for domestic capital procurement.
  • Corporatisation of Ordnance Factory Board - FM says she hopes that it will eventually get listed on the stock exchange.

4. 60% of the Indian airspace is freely available, because it is fairly restricted for civil and defence purposes, we have been taking longer routes. This has to be rationalised for optimum utilisation of time and fuel. Customers can get to their destinations quicker and cheaper. We will be able to get to our destinations at the shortest time. This is an environment friendly step with a big implication on civil aviation.

SEE ALSO: Modi is using the COVID-19 crisis to push through APMC reforms he has wanted for long⁠— but states may oppose

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5. Six more airports are up for auction. Additional investment by private players in 12 airports expected to garner ₹13,000 crore. Another 6 airports will be auctioned in the third round. The Airports Authority of India will get a down payment of ₹2,300 crore.

6. Power distributors in Union Territories will be privatised:
  • Discoms to ensure adequate power, load-shedding to be penalized.
  • Reduction in cross-subsidies.
  • Direct benefit transfer for subsidy and usage of smart prepaid meters.
  • Privatisation of discoms can be emulated by States.
7. Private investment in social infrastructure like hospitals:
  • ₹8,100 crore funding scheme announced as Viability Gap Funding (VGF).
  • Quantum of viability gap funding in social Infrastructure projects increased up to 30%. VGF will remain at 20% in other sectors.
8. Private companies will be allowed to use Indian Space Research Organisation's (ISRO) facilities and other relevant assets. Future projects for planetary exploration, outer space travel etc., will be open to the private sector. The government will also Liberal geo-spatial data policy for providing remote-sensing data to tech-entrepreneurs.

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