The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved as many as 72 amendments to the Companies Act, including decriminalising various offences, a move which would protect corporates in case of genuine commercial failures. The Bill removes criminality under the Act in case of defaults which can be determined objectively and which, otherwise, lack the element of fraud or do not involve larger public interest.
Speaking to media after Cabinet meeting, Finance Minister Nirmala Sitharaman said, "This Bill furthers ease of living for law-abiding corporates and de-clogs the criminal justice system in the country."
The Union Cabinet has approved the Companies (Second Amendment) Bill, 2019 to amend the Companies Act, 2013. With the amendments, as many as 23 offences would be recategorised out of 66 compoundable offences under the Act, Sitharaman said.
Adding to it, seven compoundable offences would also be omitted under the Act, she added.
The FM said that government is removing the imprisonment angle and reducing the punishment proposed under the act. Besides, the quantum of penalty will also be reduced, she said.
Earlier, the Companies (Amendment) Act, 2015 amended certain provisions of the Act to remove difficulties faced in implementation of various provisions of the Act.
Prime Minister Narendra Modi had promised industrialists to protect in cases of genuine commercial failures. He had urged India Inc to "invest boldly" to boost economic growth.
The Indian economy has decelerated to record low in the last few quarters, owing to a sharp slowdown in consumption demand.
Also Read: Govt approves 100% FDI by NRIs in Air India
Among others, the Cabinet has approved allowing Non-Residents Indians (NRIs) to own up to 100 per cent stake in disinvestment-bound Air India. Currently, NRIs can acquire only 49 per cent in Air India. The announcement comes at a time when the government is looking to sell 100 per cent stake sale in the national carrier.
By Chitranjan Kumar