Coronavirus-related debts to be excluded from defaults under IBC: FM

New Delhi: Debts related to the coronavirus pandemic will not be included in default category under the Insolvency and Bankruptcy Code (IBC) for one year, Union finance minister Nirmala Sitharaman said as part of measures for businesses.

Nirmala Sitharaman said the new Insolvency and Bankruptcy Code (IBC) proceedings suspended for one year as she talked about the last tranche of the Rs 20 lakh crore economic stimulus.

“At the moment MCA (ministry of corporate affairs ) has extended this by six months and we intend to extend this by another six months. For MSMEs, a special insolvency framework will be notified under section 240-A of IBC,” she said.

The minimum threshold for initiating IBC proceedings has already been raised from Rs 1 lakh to Rs 1 crore, which largely insulates MSMEs, she added.

The finance minister said on Saturday said eight sectors will undergo structural reforms.

On Friday, Sitharaman had announced Rs 1 lakh crore Agri Infrastructure Fund for farm gate infrastructure for farmers and Rs 10,000 crore scheme for the formalisation of Micro Food Enterprises (MFEs) under the Rs 20 lakh crore stimulus package.

She also proposed amendments to the Essential Commodities Act to enable better price realisation for farmers and said no stock limit should apply to processors or value chain participants.

The finance minister had announced the ‘One Nation One Ration Card’, free food grain supply to migrants and creation of affordable rental housing complexes (ARHC) in urban areas for migrant workers and poor under the Covid-19 stimulus package on Thursday.

She focused on the Micro Small and Medium Enterprises (MSMEs) and the middle class on Wednesday.

They came after Prime Minister Narendra Modi on Tuesday announced the economic package for the country to become ‘self-reliant’ and deal with Covid-19 crisis.