Govt ends monopoly in coal mining, ups FDI limit in defence manufacturing

The government will end its monopoly in coal mining by allowing private companies and raise the limit for foreign investment in defence manufacturing without regulatory approval from 49 per cent to 74 per cent, said Finance Minister Nirmala Sitharaman on Saturday.

“India won’t look inwards and won’t be self-isolationist as it tries to be self-reliant,” she said as she listed “structural reforms” for eight sectors, namely coal, minerals, defence production, civil aviation, power distribution in Union Territories, space research and atomic energy.

Mining and defence manufacturing reforms

Sitharaman said the government would end its monopoly in coal mining by allowing private companies. Commercial mining will be on a revenue-sharing mechanism instead of the regime of fixed rupee/tonne. Nearly 50 blocks will be up for bidding, and the government will invest Rs 50,000 crore for building evacuation infrastructure.

ALSO READ: FM LIVE: Govt ends coal mining monopoly, allows pvt firms in space research

As many as 500 blocks of minerals will be auctioned in a composite exploration-cum-mining-cum-production regime. The distinction between captive and non-captive mines will be removed to allow the transfer of mining leases and the sale of surplus unused minerals, leading to better efficiency and production.

To boost the government’s Make in India campaign, foreign investment limit in defence manufacturing will be hiked to 74 per cent from 49 per cent while some weapons and platforms will be banned for imports. Items banned for imports can only be purchased from within the country, she said.

Private companies will be allowed a role in India’s space programme, including in satellites, launches, and space-based services. | Photo: ISRO

State-owned Ordnance Factory Boards will be corporatised for better management and will later be listed on the stock market, she said adding the decision “doesn’t mean privatisation”.

Power distribution companies in Union Territories (UTs) will be privatised for better service and the plan would be a “model for emulation by other utilities across the country”, she said.

Airports and space exploration

Six more airports will be auctioned for private participation and restrictions on flying Indian air space will be eased to reduce travel time and save fuel. Private players will invest an additional Rs 13,000 crore in 12 airports auctioned earlier.

Private companies will be allowed a role in India’s space programme, including in satellites, launches, and space-based services.

ALSO READ: Power distribution companies in UTs to be privatised, says Finance Minister

The companies will get to use the facilities of ISRO, the state-owned space agencies. Future projects for planetary exploration and outer space travel would be open for the private sector, she said.

India will set up a research reactor in PPP mode for the production of medical isotopes for treating cancer and other diseases.

Sitharaman, since Wednesday, has announced measures for the poor, migrant workers, farmers, organised sector workforce, middle-income groups, and small businesses.

In an address to the nation on Monday, Modi said the package was equivalent to 10 per cent of India’s gross domestic product and was meant to support workers and businesses reeling from the impact of the lockdown.