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Cabinet Approvals on July 22, 2021

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The Union Cabinet which is held on July 22, 2021, under the chairmanship of Prime Minister Narendra Modi has approved the following initiatives.

  • Integrated Multi-Purpose Infrastructure Development Corporation for Ladakh
  • Production Linked Incentive (PLI) Scheme for Specialty Steel
  • 100 percent Foreign Direct Investment (FDI) in public sector refiners

a.Integrated Multi-purpose infrastructure Development Corporation for Ladakh:

i.The Union Cabinet has approved the establishment of the 1st ‘Integrated Multi-purpose infrastructure Development Corporation’ for the Union Territory (UT) of Ladakh.

ii.About the Corporation:

Authorized Share CapitalRs 25 crore
Recurring ExpenditureRs 2.42 crore/year

Post Creation under the corporation

Managing Director (MD) with pay scale of Rs 1,44,200 – Rs 2,18,200

iii.Function of the corporation:

  • It will act as a construction agency for the development of Ladakh infrastructure and ensure employment generation through development works of industry, tourism, and transportation.
  • It will support human resources development, increase domestic production of goods and services, and help realise Atma Nirbhar Bharat.


  • The State of Jammu and Kashmir was reorganised into the UT of Jammu and Kashmir (J&K), and the UT of Ladakh (without Legislature) based on the J&K Reorganisation Act, 2019 on October 31, 2019.
  • After such reorganisation an Advisory Committee was constituted under section 85 of the J&K Reorganization Act, 2019 to make recommendations on the apportionment of the assets and liabilities of the State of J&K between the UT of J&K and the UT of Ladakh.
  • That Committee has recommended the establishment of an ‘Integrated Infrastructure Development Corporation Limited’ in Ladakh on the lines of the Andaman & Nicobar Islands Integrated Development Corporation Limited (ANIIDCO).

b.PLI Scheme for Specialty Steel:

i.To increase the production and minimise the imports of ‘value-added steel/Speciality Steel’, the cabinet has approved the PLI Scheme.

ii.About the PLI Scheme:

Tenure5 years (from 2023-24 to 2027-28)
Budgetary Outlay (Incentives over 5 years)Rs 6322 crores
Expected Bring in Investment~ Rs 40,000 crores
Capacity Addition25 MT
Employment Generation Potential5.25 lakh

(68,000 Direct Employment)

iii.Current Status of Speciality Steel:

  • Minimal Production: In FY21, out of the production of 102 million tonnes of steel in India, only 18 million tonnes was the speciality steel.
  • Larger import: Out of 6.7 million tonnes of imports in FY21, ~4 million tonnes were the import of speciality steel, resulting in Foreign Exchange(Forex) outgo of ~Rs 30,000 crores.

iv.Projected Output based on PLI Scheme:

  • Around 42.2 million tonnes of Speciality Steel production worth ~2.5 lakh crores is expected by the end of 2026-27.
  • Export of the speciality steel is estimated to be around 5.5 million tonnes and 0.9 million tonnes of import is also expected.
  • Through this scheme, the steel value of India will become equivalent to Korea and Japan (Advanced steel making countries).
  • Manufacturing: Through the scheme, India might manufacture API grade pipes, Head Hardened Rails, electrical steel.
  • There are 3 slabs of PLI incentives, the lowest being 4 percent and the highest being 12 percent.

About Speciality Steel:

i.It is formed by converting normal finished steel into high value-added steel by way of coating, plating, heat treatment, etc. It could be used for different purposes like Defence, Space, Power, apart from the automobile sector, specialized capital goods etc.

ii.5 Categories of Specialty Steel that are Chosen under the PLI Scheme:

  • Coated/Plated Steel Products
  • High Strength/Wear-resistant Steel
  • Speciality Rails
  • Alloy Steel Products and Steel wires
  • Electrical Steel

Note As PLI is fund limited, a company could avail benefits with a cap of Rs 200 crore only.

c.100 percent FDI in public sector refiners

i.The cabinet has approved a proposal to allow 100 percent FDI under automatic route in oil and gas public sector unit (PSU), which has received ‘in-principle’ approval for strategic disinvestment in its sector.

ii.Existing FDI policy: Currently only 49 percent FDI is permitted in public sector refineries and 100 percent in the private sector.

  • Thus foreign companies are not allowed to place their bids over PSUs due to the 49 percent limit.

ii.Hence, the current expansion under the scope of FDI in oil refineries would facilitate the privatisation of India’s 2nd biggest oil refiner Bharat Petroleum Corp Ltd (BPCL).

  • The union government is set to privatise BPCL by selling its entire 52.98 percent stake in the company.
  • Vedanta, a mining-to-oil conglomerate and US-based private equity firms viz, Apollo Global and I Squared Capital’s arm Think Gas, have put in an expression of interest (EoI) for buying the stake of BPCL.

Recent Related News:

i.On May 25, 2021, the Union Cabinet approved the Opening of a New Consulate General of India in Addu City, the Maldives in 2021. It is India’s 1st Consulate in the Maldives.

ii.On June 9, 2021, the Union Cabinet approved the allotment of a 5 MHz spectrum in a 700 MHz band to Indian Railways and an Extension of applicability of the New Investment Policy (NIP)-2012.

About Bharat Petroleum Corp Ltd (BPCL):

Establishment –  1952 (as Burmah Shell Refineries Ltd.)
Chairman and Managing Director (CMD) – K. Padmakar
Headquarters – Mumbai, Maharashtra

About Ladakh:
National Park – Hemis National Park Ladakh
Wildlife Sanctuaries – Karakoram Wildlife Sanctuary, Changthang Cold Desert Wildlife Sanctuary