NATIONAL, 19 JUNE, 2020 (GPN): Mr. Abhay Vohra, Partner at Burgeon Law: “In light of the economic duress and financial instability in businesses occasioned due to the unfortunate COVID-19 pandemic, the Indian government’s move to promulgate an ordinance with respect to the country’s insolvency laws is evident of the policy makers’ tacit acknowledgement that msme/small business has been adversely impacted and hence, this step has been widely appreciated. The entire business community stands aghast at the way things have unfolded and affected the industry post the virus outbreak and subsequent lockdown. The MSME sector, which forms the formidable backbone of the Indian economy has undeniably been the worst hit by the outbreak. Small businesses, who are already plagued with a lack of financial support and steady cash flow, were strapped of their day-to-day operations and subsequent earnings.
Considering the plight of MSME players, the government’s decision to do away with sections 7, 9 and 10 of the Insolvency and Bankruptcy Code (IBC) during a stipulated exemption period will offer small business the much needed breathing space that they require to survive and hopefully in due course revive from the harsh blow on the financial status of enterprises given the dip in business morale and languidness in cash flow transactions caused by this unprecedented crisis situation.
The welcome decision goes to show that the government recognizes the role of the MSME sector in the restoration of India’s economic growth in the post-COVID era and is taking tangible steps to ensure that the small businesses have the liquidity required to tackle the financial crisis left in the wake of COVID-19.” ENDS
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