Today the Finance Minister made the announcement of last tranche of Rs 20 Lakh Crore economic relief package promised by the Prime Minister.
The FM mentioned in her announcement that, in order to prove the resolve to build a self reliant Bharat and to meet global challenges, reforms on land, labour, liquidity and law has been emphasised in this package.
Today’s announcement covered 7 step measures comprising: 1. MGNREGA; 2. Urban and rural Health and educational sector; 3. Businesses and Insolvency Bankruptcy Code; 4. Decriminalisation of Companies Act, 2013; 5. Ease of Doing Business reforms; 6. Public Sector enterprises and policy thereof, 7. State Government and resources related to State Governments. Lastly the Finance Minister detailed the allocation of Rs 20 Lakh Crores towards each reform announced over the past 5 days.
A highlight of the announcement made today is as under:
- Rs 40K crores additional allocation is being made for generation of employment in addition to budget allocation of Rs.61K crores.
- Public expenditure on health institution will be increased. Investment in grass route levels will be ramped up, in Health and wellness Centres in tier II and tier III cities.
- All district will have infectious disease Hospital Blocks.
- Lab networks will be strengthened. Integrated Public Health Labs will be set up in all Block levels in each district to enable India to face this Pandemic or any other Pandemic.
- National Institutional platform for one health by ICMR will be encouraged.
- National Digital Health Mission Blueprint will be implemented.
- Towards delivering Technology driven education, One Nation One digital platform to be launched.
- One earmarked TV channel to be made available for each class. Extensive use of radio, community radio and podcast will be made. Special e-content for hearing impaired and visual impaired children will be created.
- Top 100 universities will automatically be allowed to start delivering their courses online.
- Initiative for psychological support. for students, teachers and families will be launched.
Insolvency Bankruptcy Code
- Many businesses have been severely affected due to COVID-19 pandemic. Any debt incurred or defaulted because of COVID-19, they shall not be included in the category of default.
- Suspension of fresh insolvency proceeding up to 1 year depending on pandemic situation. This was previously extended to 6 months in March 2020.
- For MSMEs a special insolvency framework will be notified under section 240A of the IBC. One major benefit will be increase in minimum threshold to initiate insolvency proceeding from Rs 1 lakh to Rs 1 crore. This will come as an ordinance immediately.
Companies Act, 2013 – relaxation
- During COVID-19 compliance burden was a concern, and timely action was taken to reduce the compliance burden. Companies could conduct board meeting, EGM, AGM through Video Conference, and even rights issues can be done by leveraging on technology.
- Further, prior to the lockdown, the deadlines under Companies Act, 2013 were extended, to put all at ease. Now minor technical and procedural defaults under the Companies Act, 2013 will be Decriminalised (such as inadequacies in Board report, short comings in CSR reporting, filing defaults or delay in holding AGM).
- 40 compoundable section to be shifted to Internal adjudication mechanism (IAM) and powers of Regional director for Compounding will be enhanced, to reduce harassment faced by the Companies. Now 58 sections will be dealt with under the internal adjudication mechanism as compared to 18 which was earlier.
- The Amendments will de-clog the criminal courts and NCLT.
- 7 compoundable offences altogether dropped and 5 to be dealt with under alternative framework.
Ease of doing Business for Corporates
- Indian Public Companies can Directly list its securities in permissible foreign jurisdictions.
- Private companies which list their Non-Convertible debentures (‘NCDs’) on stock exchange will not be regarded as Listed companies.
- Provisions of Part IX-A on producer companies of Companies Act, 1956 will be brought in Companies Act, 2013.
- Power to create additional/ specialised benched for NCLAT will be brought in the Companies Act, 2013.
- Lower penalties for defaults for small companies, one-person companies, Producer companies & Start-ups.
- The Finance Minster mentioned that, Public sector enterprise policy needs to be coherent with PM’s ambition for Atmanirbhar Bharat.
- All sectors will be open for Private sector, and Public sector enterprises will play a very crucial role.
- Government will announce new policy, whereby, List of Strategic sectors requiring presence of PSUs in Public interest will be notified.
- In such sectors at least 1 PSU will be present. Whereas private will also be allowed to play their role in it.
- Not more than 4 PSUs will be there in any such notified sector. If there are more, then they will be merged or dealt with to avoid mushrooming of PSUs in these sectors.
In summary, the list of outlay for each reforms comprising Rs 20 Lakh crores and the support to be given to State Government was also laid out by the Finance Minister.