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 and matters relating to Insolvency and Bankruptcy Code. The key highlights of the press conference are summarized hereunder.
1. 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. It has been decided to notify new special insolvency resolution framework for MSME under section 240A of the Insolvency and Bankruptcy Code, 2016.
3. 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. 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. 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 a monetary penalty on companies.
6. Provisions of old Companies Act, 1956 pertaining to producer companies being included in the new Companies Act, 2013.
7. The various compoundable offences sections to be shifted to the internal adjudication mechanism of Companies Act, 2013, and enhancing the power of RD for compounding of offences related to companies act.
8. In order to ease of doing business, it has decided to direct listing of securities by Indian public companies in permissible foreign jurisdictions.
9. Private companies that list NCDs on stock exchanges will not be regarded as listed companies.
10. Lower penalties for all defaults for small companies, one-person companies, producer companies and startups.
11. The Govt. will allocate an additional Rs. 40,000 crore MGNRENA to provide work for migrants returning homes.
12. The education sector hit drastically due to the 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 the technology-driven system. In addition to that, 200 new textbooks added to e-Paathshaala.