Atma Nirbhar Bharat Abhiyan Part-5

Union Minister of Finance and Corporate Affairs- Smt. Nirmala Sitharaman had on Sunday, 17^th day of May, 2020 unveiled the fifth and last tranche of Government’s Rs. 20 lakh crore economic package to provide relief to various segments of the economy battered by coronavirus lockdown. While in the earlier announced four installments, Government focused on measures to boost NBFCs. MSME, reduction in tax rates of TDS and TCS, extension of due dates of filings of returns, extension of Registration and Completion Date of Real Estate Projects under RERA, bringing in EPF reforms, reliefs for agriculture sector, amending the age old Essential Commodities Act, providing credit lines to smaller firms,  food grains to migrant workers, working capital incentives for street vendors, support to banking and electricity distributors, coal, minerals, defence production, civil aviation, power distribution, social infrastructure, space and atomic energy, the fifth and last tranche focused to increase borrowing power of States, an additional allocation of Rs. 40,000 crore for MNGREGA workers and the inclusion of private players in public sectors enterprises . The key announcements of the fifth tranche are as under:

• Health Reforms & Initiatives
  • Increased investments in Public Health –

• • • 1. Public Expenditure on Health will be increased.
      2. Investments in grass root health institutions to be made.
      3. Ramp up Health and Wellness Centres in rural and urban areas
  • Preparing India for any future pandemics –

• • 1. Infectious Diseases Hospital Blocks to be setup in all districts
    2. Strengthening of lab network and surveillance by Integrated Public Health Labs in all districts & block level Labs & Public Health Unit to manage pandemics.
    3. Encouraging Research by constituting National Institutional Platform for One health by ICMR
    4. National Digital Health Mission for Implementation of National Digital Health Blueprint
• Enhancement of Ease of Doing business through IBC related measures

• • Minimum threshold to initiate insolvency proceedings raised to Rs. 1 crore (from Rs.1 lakh, which largely insulates MSMEs).
  • Special insolvency resolution framework for MSMEs under Section 240A of the Code to be notified soon.
  • Suspension of fresh initiation of insolvency proceedings up to one year depending upon the pandemic situation.
  • Empowering Central Government to exclude COVID 19 related debt from the definition of “default” under the Code for the purpose of triggering insolvency proceedings.

• Decriminalization of Companies Act defaults

• • Decriminalization of Companies Act violations involving minor technical and procedural defaults (shortcomings in CSR reporting, inadequacies in board report, filing defaults, delay in holding AGM).
  • Majority of the compoundable offences sections to be shifted to internal adjudication mechanism (IAM) and powers of RD for compounding enhanced (58 sections to be dealt with under (IAM) as compared to 18 section define 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

• • Improvement in rankings in ‘starting a business’ and ‘insolvency resolution’ have contributed to the overall improvement in India’s ranking on Ease of Doing Business.
  • Further key reforms to include –

• • 1. Direct listing of securities by Indian public companies in permissible foreign jurisdictions.
    2. Private companies which list NCDs on stock exchanges not to be regarded as listed companies.
    3. Including the provisions of Part IXA (Producer Companies) of Companies Act, 1956 in Companies Act, 2013.
    4. Power to create additional/ specialized benches for NCLAT
    5. Lower penalties for all defaults for Small Companies, One person Companies, Producer Companies & Start-Ups.

• Public Sector Enterprise Policy for a New, Self-reliant India

• • India and the world have changed in the last few decades accordingly need for a new coherent policy, where all sectors are open to the private sector while public sector enterprises (PSEs) will play an important role in defined areas.
  • Accordingly, the government will announce a new policy whereby;

• • 1. List of strategic sectors requiring presence of PSEs in public interest will be notified
    2. In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed
    3. In other sectors, PSEs will be privatized (timing to be based on feasibility etc.)
    4. To minimize wasteful administrative costs, the number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatized/ merged/ brought under holding companies.

  Last Updated: 18th May 2020 This article is contributed by:  Munesh Gaur Manager, Legal  

Tag: Atma Nirbhar Bharat