Union finance minister (FM) Nirmala Sitharaman said Debts related to the coronavirus pandemic will not be included in the default category under the Insolvency and Bankruptcy Code (IBC) for one year.
She made this announcement a part of business measures.
She also announced that the new Insolvency and Bankruptcy Code (IBC) proceedings will remain suspended for one year.
“At the moment MCA (ministry of corporate affairs ) has extended this by six months and we intend to extend this by another six months. For MSMEs, a special insolvency framework will be notified under section 240-A of IBC,” she added.
Currently, the Ministry of Corporate Affairs has extended the proceedings by 6 months and the government intends to extend this by another 6 months, and for MSMEs, a special insolvency framework will be notified under section 240-A of IBC.
The minimum threshold to initiate insolvency proceedings has been raised to ₹1 crore from the earlier ₹1 lakh and this will largely insulate MSMEs
On Saturday, FM said eight sectors will go under structural reforms.
On Sunday, FM announced the fifth and final tranche of Rs. 20 lakh crore package under the Atmanirbhar Bharat Abhiyan.
FM Sitharaman focused on seven steps to boost Atmanirbhar Bharat Abhiyan and these seven steps were:
- business and COVID-19
- decriminalization of Companies Act
- Ease of doing business
- Public sector enterprises and state governments.
These announcements came after Prime Minister Modi announced the economic package for the nation to become ‘self-reliant’ and deal with the COVID-19 crisis.