Finance Minister Nirmala Sitharaman on Sunday raised the minimum threshold to initiate insolvency proceedings to Rs 1 crore from the earlier Rs 1 lakh. In addition, with an eye on further enhancement of ease of doing business, the government announced suspension of fresh initiation of insolvency proceedings up to one year.
Also coronavirus related debt would be excluded from the definition of "default" under the insolvency and bankruptcy code (IBC). "No fresh insolvency proceeding will be initiated up to 1 year. At the moment MCA has extended this by 6 months, we intend to extend this by another 6 months. For MSMEs a special insolvency framework will be notified under section 240-A of IBC. The minimum threshold to initiate insolvency proceedings raised to Rs 1 crore from the earlier Rs 1 lakh, which largely insulates MSMEs," she added.
The Finance Minister, in her fourth presser on Saturday, had announced structural reforms in sectors such as coal, minerals, civil aviation, power distribution, defence production, space, and atomic energy sector. The reforms were unveiled as a part of the government's efforts to make India 'Aatmanirbhar' (self-dependent). Sitharamana has already announced four phases of relief measures to support agriculture, MSMEs, migrant workers, individuals, coal mining, defence, aviation sector, among others amid the ongoing coronavirus-induced lockdown.
Meanwhile, India reported 4,987 fresh coronavirus cases in 24 hours, the highest 1-day spike, with 120 deaths in a day as the country gears to enter its fourth phase of lockdown. The Ministry of Home Affairs (MHA) is likely to announce the guidelines of lockdown 4.0 on Sunday