SME Times News Bureau | 07 Sep, 2015
The Ministry of Micro, Small
& Medium Enterprises (MSME) has
notified a Framework for Revival and Rehabilitation of MSMEs, in exercise of
the powers conferred under section 9 of the Micro, Small and Medium Enterprises
Development Act, 2006.
Union Minister for Micro, Small and Medium Enterprises (MSME) Kalraj Mishra has
recently posted on his social media page about his ministry's notification on framework
for revival and rehabilitation of small enterprises.
It said, The In India, the existing
mechanism for addressing revival, rehabilitation and exit of small enterprises
is very weak.
The most recent Doing Business (DB)
Report, a joint project of the World Bank and the International Finance
Corporation, ranks India 137 out of the 189 economies for resolving
insolvencies.
It notes that resolving insolvency
takes 4.3 years on average and costs 9.0 percent of the debtor's estate,
with the most likely outcome being that the company will be sold as piecemeal
sale.
Pending a detailed revision of the
legal framework for resolving insolvency/bankruptcy, there is a felt need for
special dispensation for revival and exit of MSMEs.
The MSMEs facing insolvency/bankruptcy
need to be provided legal opportunities to revive their units. This could
be through a scheme for re-organization and rehabilitation, which balances the
interests of the creditors and debtors.
It is expected that above Framework
will help the lenders and debtors in revival and rehabilitation of enterprises
and shall unlock the potential of MSMEs, besides improving our international
ranking in Doing Business Index, the post added.