Provision of subsidy effectively lowers the cost of borrowing for Micro and Small Enterprises (MSEs) thereby enhancing the viability and profitability of such enterprises. There are several laws, at present, to handle insolvencies and bankruptcies.
These include Companies Act, 2013, Recovery of Debt Due to Banks and Financial Institutions Act, 1993 (RDDBFI), The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) and Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Insolvency of individuals is covered under The Presidency Towns Insolvency Act, 1909, and Provincial Insolvency Act, 1920.
The existing mechanism involves time consuming processes. Therefore, Government has introduced a comprehensive Insolvency and Bankruptcy Bill, 2015 in the Parliament.
This information was given by the Minister of State, Micro, Small and Medium Enterprises, Giriraj Singh in a written reply to a question in Rajya Sabha on April 28.
Source: PIB