Economy

Takeaways From Nirmala Sitharaman's Announcements For Defence, Aviation

Takeaways From Nirmala Sitharaman's Announcements For Defence, Aviation”

Announcing a series of far-reaching reforms for defence sector, Finance minister Nirmala Sitharaman said the government will make separate budgetary provisions for procuring Indian made defence equipment to help reduce the defence import bills as well as give a booster dose to Make in India scheme a super success post COVID-19 pandemic.

Union Finance Minister Nirmala Sitharaman (who was Defence Minister from September 3, 2017, to May 31, 2019), announced the change that could encourage global biggies like Boeing, Lockheed Martin, Airbus, Saab, to invest in India.

On imports, the Finance Minister said while essential weapons not produced domestically will be imported and the negative list will have a year wise timelines to reduce import dependency, the government is firm on moving towards indigenisation of spare parts for foreign weapons/platforms and planes that are in service. Commercial mining will be done on revenue sharing mechanism instead of the regime of fixed rupee/tonne. The minister announced that almost 50 blocks along with coal-based methane gas reserves will be offered immediately for auction. "This is a sector which has tremendous potential in India", she said. We have now come to a conclusion that we shall notify a list of weapons and platforms which shall not be allowed for import. It will be done after consultation with Department of Military Affairs. This comes after the government identified 12 airports for privatisation.

"India will become a global hub for aircraft maintenance, fix and overhaul, with value of component repairs and airframe maintenance to increase from Rs 800 crores to Rs 2,000 crores over the next three years", Sitharaman said.

Foreign Direct Investment (FDI) in the defence manufacturing under automatic route will be increased to 74 per cent from the existing 49 per cent. FDI under the automatic route excludes investment by China and other nations that share a border with India, after the government amended the FDI policy last month.

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She also said that major engine manufacturers from across the globe would set up engine fix facilities in India in the coming year.

Power distribution companies in Union Territories to be privatised. This will be in line with tariff policy which is soon to be announced.

The finance minister said social infrastructure projects suffer from poor viability. Through this, we expect to meet the urgent requirement for social infra in the country.

"India has ISRO, which has brought a lot of laurels". The government has aimed to make predictable policy for private players to make them co-travellers for Atma Nirbhar Bharat, " Sitharaman said. The Centre will also establish facilities in PPP mode to use irradiation of technology for food preservation. To link India's robust startup ecosystem to the nuclear system, technology development cum incubation centres will be set up.

"Regarding atomic energy, there shall be a research reactor in the public-private partnership (PPP) model to be established for the production of medical isotopes. These will foster synergy between research facilities and tech entrepreneurs", she said.



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