IBC extension, reforms, focus on rural economy among laudable features of stimulus package: ASSOCHAM
May 17, 2020
New Delhi [India], May 17 : Describing emergent measures like one-year abeyance for the insolvency proceedings under Insolvency and Bankruptcy Code (IBC) and further reducing company law compliance burden as a hallmark of an agile and responsive government, the ASSOCHAM today said the Prime Minister's Rs 20 lakh crore economic package for dealing with the COVID-19 crisis would provide relief to stressed businesses while the medium to long term reforms would take India on the path of a fast recovery, in the post-pandemic period.
''The health and economic crisis of such a magnitude required confidence-building measures which would have boosted the sentiment to face up to the challenge. Prime Minister Narendra Modi has provided a booster even as India Inc looks forward to a significant relaxation of national lockdown in force since March 25. Getting back to economic activity and learning to live with the health emergency should enable the Indian economy to bounce back fast, " ASSOCHAM Secretary-General Deepak Sood said.
The amendments in the IBC Act and the Companies Act, which would be effected through Ordinance routes, as announced by the Finance Minister Nirmala Sitharaman, reflect a sense of urgency. Exclusion of debts during the COVID-19 period and the extension of abeyance up to one year in IBC would provide relief to the companies which are over-leveraged. Likewise, wider de-criminalisation of provisions in the Companies Act would relieve India Inc of regulatory compliance, Sood added.
The ASSOCHAM Secretary-General further said: "A huge increase of Rs 40,000 crore in the outlays for the MNREGA taking the total to Rs 1 lakh crore for the current fiscal should provide immediate relief to the rural labour and economy. It is becoming clearer that the bounce back is going to be led by the rural economy comprising agriculture and allied sectors such as milk and fisheries and the industries related to the sector."
He also said that the announcement on the Public Sector Policy, clearly spelling out the role of the government-owned companies within a broad framework of strategic sectors would help both the private sector as also the state firms.
"There is no conflict between the public and private sector. The Finance Minister, presenting her fifth and final tranche of the PM's economic package has clearly stated that the presence of the public sector would be ensured in the strategic sectors while the number may be capped, from the point of view of operational efficiency and other requirements. It is a move aimed at getting the best out of our national assets, whether they are in the public or private sector," Sood said, adding both create jobs and national wealth.
He further said that the focus on online education both at the school and university levels is the right and progressive approach.
"Technology is the best tool available with us for outreach to 130 crore Indians. The initiatives like allowing universities to offer online programs under automatic route would go a long way in making our education more inclusive and contemporary. This is the way forward for linking with the best educational institutions in the world," Sood said.
The ASSOCHAM Secretary-General said that the enhanced priorities for the healthcare facilities, coupled with the testing labs at the district and block levels with increased public expenditure are the most needed national requirements.
"Going forward, healthcare would get increased focus worldwide; we need to ramp our healthcare infrastructure as well. Both public and private sector should join hands to cater to the health needs of our large population," he added.
Sood said that incentivising states to carry out reforms in the critical areas of power distribution and ration shops should result in operational efficiencies and improvement in their finances.
"The states are our front-end partners and warriors in emergencies like COVID-19; their financial health is of paramount importance. The measures announced by the Centre today for their support are welcome," he added.
