In news:
Spelling out the government’s fourth tranche of initiatives towards achieving the vision of ‘Atmanirbhar Bharat’, Union Finance Minister announced significant structural reforms in eight sectors of the economy — coal, minerals, defense production, aviation, power distribution in Union territories, space and atomic energy.
Coal sector:
- In the realm of coal exploration, the government has decided to liberalise the entry norms for private entities.
- Any interested party could bid for a coal block and sell it in the open market.
- The government would do away with all the eligibility conditions at the time of bidding for a coal block, except requiring an “upfront payment with a ceiling.”
- Nearly 50 coal blocks would be offered to private players immediately.
- Rs 50,000 crore would be spent by Centre in creating ‘coal evacuation’ infrastructure, which would expedite the transport of mined product to the destination.
Defence sector:
- In defence production, the government would raise the foreign direct investment (FDI) limit from current 49 per cent to 74 per cent.
- Further, the government would also work towards corporatising the ordnance factory boards.
- In a bid to boost indigenous production and gave an impetus to Make in India, the government is in a process of notifying a list of weapons/platforms for an import ban with year-wise timelines.
- These decisions would also help in reducing huge import bills.
Privatisation of electricity:
- In another announcement that could have an effect on electricity charges in the union territories.
- The power departments and utilities in all the centrally administered territories would be privatised.
- The proposed move would lead to better service to consumers and improvement in operational and financial efficiency in distribution.
Space sector:
- It also announced the opening up of the space exploration sector for private players.
- Till date, the government-run Indian Space Research Organisation (ISRO) has held a monopoly on all activities concerning space exploration and satellite launches.
- The reforms in the space sector will provide a level-playing field for private companies in satellite launches and space-based services.
- The private sector would be allowed to use ISRO facilities and other assets to improve their capacities.
- Stating that the government would provide predictable policy and regulatory environment to private players.
- It also disclosed that future projects for planetary exploration and outer space travel among others would be opened up for private entities.
Privatisation:
The transfer of ownership, property or business from the government to the private sector is termed privatization. The government ceases to be the owner of the entity or business.
Privatization is considered to bring more efficiency and objectivity to the company, something that a government company is not concerned about. India went for privatization in the historic reforms budget of 1991, also known as ‘New Economic Policy or LPG policy’.
Atomic:
Atomic energy reforms: Research reactor in PPP mode, Startup ecosystem to be linked with nuclear sector.
Aircraft:
- India to become a global hub for aircraft maintenance, repair and overhaul (MRO). Tax regime for MRO has been rationalised.
- Additional investment likely to happen in 12 airports.
- 6 more airports are for auction. AAI will do on PPP basis.
- Aviation industry will benefit by ₹1,000 crore with efficient airspace management.
- Restrictions on utilisation of the Indian air space will be eased so that civilian flying becomes more efficient.
For PSE’s:
- The government said there will be a maximum of four public sector companies in strategic sectors, and state-owned firms in other segments will eventually be privatised.
- This will be part of a new coherent Pubic Sector Enterprises Policy to be formulated to push reforms in central public sector enterprises (CPSEs).
- However, PSEs will continue to play an important role in defined areas.
- The strategic sector in which PSEs will be present will be notified and in those notified sectors, at least one PSE will be present while private will also be allowed to play their role in it.
POSSIBLE UPSC CSE MAINS QUESTION:
