Restructuring and Anti- Takeover Restructuring Measures to Protect MSME Sector: One Step Forward?

Shatakshi Tripathi, Symbiosis Law School, Pune

As India’s GDP contracts by 23.9% in the first fiscal of this financial year, it does not come as a surprise that businesses continue to suffer the collateral damage of the COVID pandemic. With crumbling market conditions, active measures have been adopted by the Governments, across the globe, to pacify the increasing distress in the economy. The Indian Government also adopted various measures to mitigate the impact of the COVID crisis, especially on the Micro, Small and Medium Enterprise (“MSME”). Amongst other fiscal measures, the struggling MSME sector gained its first sigh of relief through the Confederation of Indian Industry’s (“CII”) idea to set-up a COVID Rehabilitation and Relief Fund to provide direct monetary assistance to the MSMEs. Along with this, the CII also recommended various measures, inter alia, an extension of bank loans, a special fund, steps regarding the filing of GST and improving the welfare of workers etc. that were necessary to tide in MSME’s through the pandemic. In this article, the author analyzes the measures adopted to protect the MSME sector, with a special focus on the debt restructuring measures and safeguards against opportunistic takeovers.

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