Government opens doors to a greater private role in defense, power, space | India News
Although the reform measures do not immediately address concerns about the need to stimulate demand, Sitharaman said the steps to provide funds to MSMEs, as well as tax refunds, which is money that belongs to taxpayers, and deferred payment it will leave more money in the hands of the people. . Saturday’s move was intended to signal India’s willingness to proactively seek investment and instill confidence in business circles.
“I am not saying that you have done everything possible, we are trying to help people so that they can have money in their hands now and that will definitely help to increase demand,” he told reporters, adding that the measures announced by the government It will create a better environment for investment and allow companies to return to business as soon as the closing is relaxed.
Reforms in various sectors, led by defense, have been previously discussed, but strong stress in the economy seems to have provided the stimulus to reconsider reluctance to let the private sector in even in areas such as space development. In a big push for the “Make in India” initiative, the government is now issuing a list of items where imports will be banned and parts indigenization will be promoted. Sitharaman said that this list will be expanded every year.
At the same time, to address concerns related to inadequate foreign tenure, the government decided to increase the FDI limit for defense production under the automatic route to 74%, from the current 49%.
Along with the defense sector, the government also decided to push for the privatization of power distribution companies after a gap of more than a decade and said that the unrest in the Union Territories will be privatized, an experiment that has previously helped to consumers in Delhi. The move will open lucrative markets like Chandigarh and Pondicherry, with the possibility of power distribution in Jammu and Kashmir also by the private sector. But to ensure that consumers don’t undergo short changes, FM said the move will come with the new fee policy, which will ensure that inconvenience inefficiencies are not a burden on consumers.
The move to privatize discoms again signals the Modi administration’s efforts to get the government out of areas where it shouldn’t be operating. While Air India and BPCL’s privatization initiatives were steps in this direction, Covid-19 has impacted the initiative and the measure of discomfort is unlikely to see aggressive offers immediately.
However, the FM announcement to auction coal blocks and other mining activities was once again intended to attract private participation in areas that have until now been dominated by Coal India and other public sector entities. Some of the steps in the coal and mining sector were a reiteration of previous announcements, although the government indicated that it will provide a new impetus to coal gasification and the extraction of methane in the coal beds.
There was a major policy shift in the space sector, where the government first announced its intention to allow the private sector to be a partner in future planetary exploration and outer space travel initiatives like the Chandrayaan and Mars mission. This came with the promise of providing a level playing field for private space satellite companies, launches and services.