Atmanirbhar Bharat: Government Reforms and Enablers
FM ANNOUNCEMENT: 5TH TRANCHE OF ECONOMIC PACKAGE
EMPLOYMENT GENERATION AND IBC MEASURES
- To address the need for more employment, INR 40,000 crore will be allocated under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) by the government. The additional sum will generate a total of about 300 crore person-days. 1
- Insolvency and Bankruptcy Code (IBC) related measures: 1
- The minimum threshold to initiate insolvency proceedings increased from INR 1 Lakh to INR 1 crore
- Special insolvency resolution framework to be notified for MSMEs under Section 240A of IBC
- Depending upon the pandemic situation, fresh initiation of insolvency proceedings will be suspended for 1 year
- COVID 19 related debt to be excluded from the definition of “default” under IBC
EASE OF DOING BUSINESS
- Corporate law measures to boost EoDB: 1
- Companies Act violations that involve minor technical and procedural defaults such as shortcomings in Corporate Social Responsibility (CSR) reporting, inadequacies in Board report, filing defaults, delay in holding of AGM will be decriminalized.
- A total of seven compoundable offences will be dropped and five will be dealt with under an alternative framework.
- The amendments will help in de-clogging the criminal courts and National Company Law Tribunal.
- EoDB reforms introduced for corporates: 1
- Direct listing of securities by Indian public companies in permissible foreign jurisdictions.
- Private companies which list non-convertible debentures (NCDs) on stock exchanges not to be regarded as listed companies.
- Including the provisions of Part IXA (Producer Companies) of Companies Act, 1956 in Companies Act, 2013.
- Power to create additional/ specialized benches for National Company Law Appellate Tribunal (NCLAT).
- Lower penalties for all defaults for Small Companies, One-person Companies, Producer Companies & Start-Ups.
NEW PUBLIC SECTOR ENTERPRISE POLICY
- The Government will announce a new Public Sector Enterprise (PSE) Policy whereby: 1
- A list of strategic sectors which require the presence of PSEs will be notified.
- Private players will be allowed but at least one enterprise will remain in the public domain in strategic sectors.
- PSEs to be privatised in all other sectors.
- Enterprises in strategic sectors will be privatised/ merged/ brought under holding companies and the number of enterprises will be less than four to minimise wasteful administrative expenses.
SUPPORT TO STATE GOVERNMENTS
- The Central Government will increase the borrowing limits of States from 3% to 5% for the year 2020-21 which will give the States about INR 4.28 lakh crore of extra resources. 1
- Some portion of the borrowing will be connected to specific reforms which will cover following areas: 1
- Universalisation of ‘One Nation One Ration card’
- Ease of Doing Business
- Power distribution
- Urban Local Body revenues
- The department of expenditure will notify a special scheme to increase the borrowing limit in the following pattern: 1
- Unconditional increase of 0.50%
- 1% in four tranches of 0.25%, with each tranche connected to reform actions
- 0.50% if milestones are achieved in at least three out of four reform areas
- Public expenditure on health will be increased by more investment in grass-root health institutions and the development of Health and Wellness Centres in rural and urban areas. 1
- National Digital Health Blueprint will be implemented under the National Digital Health Mission to prepare for future pandemics. 1
- Infectious Diseases Hospital Blocks and Integrated Public Health Labs will be set up in all districts to further strengthen surveillance and manage pandemics. 1
- PM eVidya programme will be launched for multi-mode access to digital/ online education. 1
- The “Manodarpan” initiative will also be launched for psycho-social support to students, teachers and families for their mental and emotional well-being. 1
- To align the Indian education system with global and 21st-century skill requirements, a new National Curriculum and Pedagogical Framework will be launched. 1
- To ensure that every child attains grade 5 level of education by 2025, a National Foundational Literacy and Numeracy Mission will be launched by December 2020. 1