Relief for the smaller developers is expected from the 5th Relief tranche. As steps announced by the FM on Sunday will benefit them.
By Varun Singh
The fifth and last tranche of the Rs 20 lakh crore economic package announced today can help smaller local developers to tide through the unprecedented crisis to some extent, and give them some time to get their business on track.
In this last tranche, the FM focussed on measures pertaining to MNREGA, businesses, and steps to improve the ease of doing business, among others. In a big relief for struggling SMEs and MSMEs from going under insolvency in the present uncertain times.
These moves are expected to provide greater relief to the industry as whole.
The FM announced that any debt incurred during Covid-19 for a company will be excluded from the default category under IBC. Additionally, she announced that no fresh insolvency will be initiated for one year.
Relief for smaller developers in form extension of deadlines.
Prashant Thakur, Director & Head – Research, ANAROCK Property Consultants, “This measure, along with previously announced sops such as extension of loan moratoriums and extension of RERA deadlines can come to the rescue of smaller local developers who are particularly impacted by the funding crunch and low sales.”
The relief package includes, decriminalization of the provisions of Companies Act.
“This is another important announcement in the series of decriminalisation of the provisions of Companies Act, 2013. This is not the first time. The Companies Act, 2013 has been earlier amended to remove criminal punishment for many procedural and trivial offences. This is being done to facilitate ease of doing business for corporate,” said Lalit Kumar, Partner at J Sagar Associates.
Manju Yagnik, Vice Chairperson, Nahar Group and Vice President NAREDCO (Maharashtra), on the relief package says, “The last tranche of “Atmnirbharta Package” brought some great reforms which would surely increase the competitiveness and productivity of Indian industry, besides fulfilling the objective of employment generation & wealth creation. It has done away with some archaic regulations which were like spoke in the wheel of progress.”
She added, “Another major reform is shifting compoundable offences under the Companies Act to an internal adjudication mechanism. Sections 7,9 and 10 of IBC will also be amended through an Ordinance to enable suspension of IBC proceedings for a year against companies that default on loan repayments.”
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