Aatma Nirbhar Bharat: Reforms in Social Infrastructure Sector

Aatma Nirbhar Bharat: Reforms in Social Infrastructure Sector- Prolawctor

Aatma Nirbhar Bharat: Introduction

On 15th of May, 2020 the Finance Minister of India Nirmala Sitharaman announced the fourth instalment of the 20-lakh crore package announced by our Prime Minister Narendra Modi. The main focus was on the eight sectors which are Coal, Minerals, Production in the Defence Sector, Air Space Management and the Airports, MROs, Power Distribution Companies, Space and Atomic Energy.

Various reforms that have been introduced

The reforms that have been introduced in various sectors are as follows:

1. Coal sector-In the Coal Sector the government has introduced industrial coal mining open to the private sector. By the privatisation of the coal industry the government has ended its monopoly which it had before. The business mining has to be executed on the income sharing mechanism which is a substitute of the regime of fastened rupee[1].50 Blocks will be supplied for the purpose of bidding. The central government will make the investment of Rs.50, 000 for this.

2. Mineral sector-In the minerals sector the main purpose of the reforms was to increase the participation of the private parties. For this purpose, 500 blocks of minerals will be auctioned in a composite exploration-cum-mining-cum-production regime. In order to reinforce the aluminium’s trade competitiveness a joint sale of both bauxite and coal would take place. This step would enable the aluminium trade and a gradual cut in the prices of the electricity. The government also mentioned that the difference between the captive and non-captive mines will be removed .This would enable to switch the mining leases and also sale of the unused material.

3. Defence manufacturing-In order to boost the Make in India plan in defence manufacturing the government of India has introduced the reforms in this sector. The government has increased the Foreign Direct Investment restriction in defence manufacturing. From 49 per cent to 74 per cent. But still it will be the topic of the defence safety clearance norms. The government has banned the import of some of the weapons and platforms which are related to defence. These weapons have to be purchased from any industry in India. The Defence minister has stated that there would be conversion of the already imported spares and their separate finance will be allocated.

4. Indian air area-The reforms that has been introduced by the Indian Government is with the aim of easing the restrictions on the utilisation of air area of India. By this reform the civil aviation will be benefited with Rs. 1,000 crore per year. This reform will save time and as well gasoline. The six extra airports will be auctioned for the private players and also extra funding of Rs. 13,000 crore has to be made by private parties in 12 airports which will be auctioned in the first and second rounds. The central government has expected restoration of the parts of the plane and also airframe upkeep which will extend from Rs.800 crore to the amount of Rs 2,000 crores in the period of three years.

5. Privatisation of electric energy distribution in union territories-The government has introduced the reforms which will lead to the privatisation of the Electrical energy distribution in the Union Territories (UTs).This privatisation will result in better electricity services to the customers and beneficiary of such services .It will also result in the operational as well as monetary efficiency in the distribution of energy.

6. Social infrastructure initiatives -The Central government will present Rs 8,100 crore as viability hole funding (VGF). This will result in the improvement of the social infrastructure. It was stated by the finance minister that the social infrastructure has been in a very poor condition and there is a need to reform it.

7. Increase participation in the area of space-In order to ensure that there is participation by the private parties, the government has planned to provide a level playing field private companies in satellites, launches and space-based services with the government owned satellites, launches and space-based services .The government will provide predictable policy as well as regulatory environment to the private players to ensure their participation. It was also stated that future space exploration programmes, planetary exploration programmes and the outer space programme will be open for the private sectors as well.

Future projects for India’s space programme and planetary exploration and outer space travel would be open for the private sector, the finance minister said, adding will provide remote-sensing data to tech-entrepreneurs in the country.

8) Atomic power related reforms -In the sector which is related to atomic power the analysis reactor in PPP mode for the manufacturing of medical isotopes that can be used as a cheap remedy for most of the cancers and other diseases which are related to the Heart of a Human Body.

Objectives of the Investment

The eight core sectors compromise 40.27% of the weightage in the items included in the Index of Industrial Production of India. The combined Index of Eight Core Sectors was 128.4 in December 2019 i.e. last year. These are sectors which have the new areas for growth and development. These Sectors can provide investment opportunities not only to the Indian Investors as well other Investors from different countries. These sectors demand more production and hence will generate more output as well as more job opportunities to the people of the country.

Its relevance in law

Recently India passed Minerals Law (Amendment) Bill in the month of March which has brought a lot of changes in the coal sector. This bill has some of the important provisions which has been also announced by the finance minister in the reforms. Before this Act the coal auctions were not allowed to be held in open market. After this bill the bidding of coal can be easily done in the open market. The Act has opened the   coal sector fully for commercial mining for the private companies which can be national as well as international companies. This act also provides the auction and allocation of mines which was previously banned by the Supreme Court in the year 2014.

The defense manufacturing industry in India is subject to industrial licence under the Industrial Development and Regulation Act,1951 and also under the manufacturing of small ammunition under the Arms Act ,1959. Earlier the limit for Foreign Direct Investment in defense manufacturing was 49% and when the new reforms were introduced it was increased to 74% .This will be amended in the act and this increase in the investment will lead to less export of weapons and more production of Weapons in India itself. The government in order to reduce the complication of licence clearances and also to reduce the huge amount that was spent on the imports has banned the import of the defense equipment’s which can be produced in India.

In the aviation Industry the minister has allocated the budget for privatization of the aviation industry, better management and more air space for commercial airlines. The increase in air space and privation of aviation industry will has led to the amendment in the Airport Authorities Act. Nirmala Sitharaman has stated the participation of the private players in the space industry and also compete in a level playing field. There are no laws which govern the space industry in India. So, after these reforms there is an urgent need for the formulation of a Space which will contain the rules regarding the liabilities, penalties, and insurance and safety standards for such activities. In order to prevent the conflict of interests a space regulatory authority has to be formulated.

The finance minister has introduced a budget of 8100 crore for the development of the social infrastructure as viability gap funding. The social infrastructure such as railways, hospitals are in a very poor condition because of the corona virus outbreak and in order to revive them the reforms have been introduced. This will require the inclusion of more developmental activities in the activities. There were some suggested amendments in the Electricity Act, 2003 which were stated by the minister in the forms in which she stated about the privatization of discoms in the Union Territories.


 The fourth installment of the fund of 20 lakh crore stated about the reforms in the eight core sectors of India which are the major contributors in the GDP of India. The reforms were introduced to promote the concept of ‘Make in India’ which will also solve the problem of increased unemployment in India. But the main criticism of the reforms is that the government has not allocated funds for the compensation of the losses which these sectors have suffered in the lock down period.

– Nishtha Sinha

[1]Coal to aviation: Finance minister Sitharaman announces structural reforms in 8 key sectors, Times of India ,16 th June ,2020

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