Finance Minister Nirmala Sitharaman on Saturday unveiled the fourth set of stimulus measures to bring structural reforms in eight sectors reeling under the countrywide coronavirus-induced lockdown. These eight sectors are — coal, minerals, defence production, airspace management, airports, Maintenance, Repair and Overhaul in aviation, power distribution companies in the Union Territories, space and atomic energy.

The stimulus is part of Rs 20 trillion fiscal and monetary package announced by Prime Minister Narendra Modi to support the economy battered by the coronavirus pandemic. “The structural reforms being announced today will impact those sectors which are new horizons of growth, unleashing new investment, boosting production and creating jobs,” Sitharaman said.


Companies abroad will be allowed to invest up to a maximum 74% in defence manufacturing in India, up from 49%, Sitharaman said. The higher foreign direct investment limit on defence manufacturing is under the automatic route, for which government approval is not required, she added.

India will stop importing weapons that can be produced locally as part of the Centre’s self reliance push in the defence sector, the finance minister said. “We will notify a list of weapons and platforms for ban on their imports and fix deadlines to do it,” she said. “Even the spares of these weapons have to be manufactured locally. This will help reduce a huge defence import bill.”

A separate budget provision will be provided for local purchases, which will reduce the import bill of defence equipment.

Meanwhile, the Ordnance Factory Board, or OFB, that makes weapons for the country’s military will be corporatised. “We will work to improve the autonomy, accountability and efficiency of OFB by corporatisation and not privatisation,” said Sitharaman, who has been the defence minister in Modi’s previous Cabinet.

Coal sector

The government will bring in commercial mining in the coal sector. “Coal is a government monopoly,” Sitharaman said. “That government monopoly is being removed. The government will move towards a revenue sharing mechanism instead of fixed pricing, to ensure competition, transparency and encourage private sector participation.”

The government will spend Rs 50,000 crore to create evacuation facilities once coal is mined. Coal beds will also be auctioned and coal bed extraction will also happen through bidding, Sitharaman said.


The government will introduce a seamless composite exploration-cum-mining-cum-production regime. Under this regime, 500 mining blocks would be offered through a open and transparent auction process, Sitharaman said.

The government will also remove the difference between captive and non-captive mines. “This will allow transfer of mining leases and sale of surplus minerals,” she added. “Earlier someone would do the exploration, someone else would bid and someone else would do the production.”

Joint auctions for bauxite and coal mines will be conducted to help the aluminium industry and the government will also create a mineral index, according to Sitharaman’s announcements.

Air space and Airports

Sitharaman announced that restrictions on air space will be partially lifted to reduce travel time and save fuel.

Only 60% of Indian airspace is freely available, she said. “This needs to be increased and optimised.
The easing of airspace use would translate to benefits of about Rs 1,000 crore per year for the aviation sector.”

Six more airports have been identified for privatisation in the second round via the public-private partnership route. The government expects Rs 12,000 crore investment in the first and second round, Sitharaman said. An additional investment of Rs 13,000 crore would be made by private players in 12 airports auctioned in two previous rounds of bidding, she added.

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Electricity distribution in Union Territories

The government will take steps to privatise power distribution companies in the Union Territories, Sitharaman announced. Power departments and utilities in the territories will be privatised

This will lead to better service to consumers as inefficiencies of the distribution companies will not be allowed to affect their energy requirements, Sitharaman said.

Social sector projects

The government plans to enhance viability gap funding for social sector projects, Sitharaman said.

The viability gap funding will be increased from 20% to 30% of the project cost. The total outlay for this is Rs 8,100 crore, she added.


The government will encourage private participation in the space sector. For boosting private participation in space activities, government will provide level playing field for private companies in satellites, launches and space-based services, Sitharaman said.

The Centre will also provide a predictable policy and regulatory environment to private players and private companies will be allowed to use Indian Space Research Organisation’s facilities or other relevant assets to improve their capacities.

Atomic Energy

The government also announced measures related to the atomic energy sector. Research reactor under public-private partnership model will be set up for the production of medical isotopes. The government will establish facilities in public private partnership model to use irradiation technology for food preservation.