Relief for Smaller Developers in 5th Relief Tranche

The 5th and last tranche of the INR 20 lakh crore economic package announced today can help smaller local developers to tide through the unprecedented coronavirus crisis to some extent, and give them some time to get their business on track. In this last tranche, the FM focussed on measures pertaining to MNREGA, businesses, and steps to improve the ease of doing business, among others.

 

In a big relief for struggling SMEs and MSMEs from going under insolvency in the present uncertain times, the FM announced that any debt incurred during Covid-19 for a company will be excluded from the default category under IBC. Additionally, she announced that no fresh insolvency will be initiated for one year so impacted businesses can focus on survival and recovery for this period.

 

This measure, along with previously announced sops such as extension of loan moratoriums and extension of RERA deadlines can come to the rescue of smaller local developers who are particularly impacted by the funding crunch and low sales.

 

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