COVID-19 Outbreak: Govt Raises Insolvency Threshold to Rs 1 Crore

The government will consider suspending Sections 7, 9, 10 of the Insolvency and Bankruptcy Code (IBC) for 6 months.

File image of Finance Minister Nirmala Sitharaman.

(Photo: PTI)

To help small companies facing the threat of defaults due to coronavirus-related lockdown, the government on Tuesday, 24 March, raised the threshold that would trigger insolvency proceedings to Rs1 crore from current Rs 1 lakh.

This raising of the threshold will help small and medium enterprises, Finance Minister Nirmala Sitharaman said.

Also, the government will consider suspending Sections 7, 9, 10 of the Insolvency and Bankruptcy Code (IBC) for six months if the current economic situation continues beyond April, she said, adding this would help companies being forced into insolvency on default of loans.

As a measure to contain the spread of the pandemic, as many as 30 states and Union Territories have ordered complete lockdown.

The Union Ministry of Health and Family Welfare on Tuesday, 24 March reported that the total number of positive cases in India has risen to 519, with 470 active cases. India's death toll rose to 10.