The Finance Minister, Smt. Nirmala Sitaraman in a press conference held on 17.05.2020 has announced series of measures in order to get back the economy in track. Now, Finance Minister has come up with Fifth trance of economic measures which are primarily focused on ease of doing business of companies
andmatters relating to Insolvency and Bankruptcy Code. The key highlights of the press conference are summarized hereunder.
1. Hikes in threshold limit for default value: The Minimum threshold limit to initiate insolvency proceedings has been proposed to be raised from 1 lakh to 1 crore. It would be the one of the major decisions taken by the Govt. in order to reduce some burden from shoulders of NCLT and NCLAT.
2. Insolvency Resolution framework for MSME: It has been decided to notify new special insolvency resolution framework for MSME under section 240A of the Insolvency and Bankruptcy Code, 2016.
3. Suspension of IBC proceedings: In order to deal with testing time arising from deadly virus, it has decided for suspension of fresh initiation of Insolvency and Bankruptcy Code, 2016 up to one year depending upon the pandemic situation.
4. Exclusion few debts from definition of default: COVID-19 related debt would be excluded from the definition of default under the Insolvency and Bankruptcy Code for the purpose of triggering insolvency proceedings.
5. Decriminalization of violation under Cos. Act: Violations involving minor technical and procedural defaults such as shortcomings in CSR reporting, inadequacy in board report, filing defaults and delay in holding AGMs will be decriminalized from Company Act. From now on, the company shall face only monetary penalty on companies.
6. New provisions for producer companies: Provisions of old Companies Act, 1956 pertaining to producer companies being included in the new Companies Act, 2013.
7. Internal Adjudication Mechanism: The various compoundable offences sections to be shifted to internal adjudication mechanism of Companies Act, 2013 and enhancing the power of RD for compounding of offences related to companies act.
8. Direct listing of securities: In order to ease of doing business, it has decided to direct listing of securities by Indian public companies in permissible foreign jurisdictions.
9. Exemption to private Cos.:Private companies which list NCDs on stock exchanges will not be regarded as listed companies.
10. Reduction in penalties: Lower penalties for all defaults for small companies, one person companies, producer companies and start ups.
11. More funds for MGNREGA: The Govt. will allocate an additional Rs. 40,000 crore MGNREGA to provide work for migrants returning homes.
12. Online Education: The education sector hit drastically due to COVID-19 pandemic, due to this, parents are facing problems in order to provide education to their offspring. Therefore, the Govt. has made provision for school education through technology driven system. In addition to that, 200 new textbooks added to e-Paathshaala.
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