Stimulus Tranche V: More sectors opened up; IBC rules suspended for 1 year; listings in foreign jurisdictions okayed, leeways given for corporate governance lapses, NCDs made more versatile

In the fifth and last tranche of the Rs 20 lakh crore economic package, Finance Minister Nirmala Sitharaman made a host of announcements for listed companies and NCD issuers that are aimed at improving ease of doing business and also India's ranking in starting business.

Among them was the announcement of allowing direct listing of securities by Indian public companies in permissible foreign jurisdictions. Private companies which list NCDs on stock exchanges will not be regarded as listed companies, the FM said.

Violations involving minor technical and procedural defaults such as shortcomings in CSR reporting, inadequacy in board report, filing defaults and delay in holding AGMs will be decriminalised from Company Act. A lower penalty will be levied on small companies, one-person companies, producer companies and start-ups for lapses.


All sectors will be opened to the private sector even as PSEs will continue to play an important role in defined areas. With this in mind, the government will announce a new policy to list strategic sectors requiring presence of PSEs. In strategic sectors, at least one enterprise will remain in the public sector, meaning private sectors will also be allowed to participate in those sectors. In other sectors, PSEs will be privatised.

To further enhance ease of doing business, minimum threshold to initiate insolvency proceedings raised to Rs 1 crore from Rs 1 lakh earlier. This will largely insulate MSMEs. The FM said that a special insolvency resolution framework for MSMEs under Section 240A of the Code will be notified soon.

Sitharaman also announced suspension of fresh initiation of insolvency proceedings of up to one year, depending upon the pandemic situation.

For this, the Central government will be empowered to exclude Covid-19 related debt from the definition of 'default' under the code. The FM said the government has dropped seven compoundable offenses while another five will be dealt with under an alternative framework.

Meanwhile, the budget allocation towards MGNREGS at Rs 61,500 crore for FY21 has been increased by an additional Rs 40,000 crore. This is seen helping generate 300 crore persons days in total.