New Delhi, Feb 1 (IANS): As India's insolvency regime grows and evolves, micro, small and medium enterprises (MSME) are set to come under the Insolvency and Bankruptcy Code.

Presenting the Union Budget for 2021-22, Finance Minister Nirmala Sitharaman on Monday announced that a special framework for resolution of bankrupt MSMEs will be introduced.

She also said that to ensure faster resolution of cases, the NCLT framework will be strengthened, the e-courts system shall be implemented and alternate methods of debt resolution will be introduced.

Among other annoucements for MSMEs, the minister said that in budget, the government has provided Rs 15,700 crore to this sector, more than double of the previous budget estimate.

Noting that MSMEs and other user industries have been severely hit by a recent sharp rise in iron and steel prices, Sitharaman told the parliament that the government is reducing customs duty uniformly to 7.5 per cent on semis, flat, and long products of non-alloy, alloy, and stainless steels.

"To provide relief to metal re-cyclers, mostly MSMEs, I am exempting duty on steel scrap for a period up to 31st March, 2022. Further, I am also revoking ADD and CVD on certain steel products. Also, to provide relief to copper recyclers, I am reducing duty on copper scrap from 5 per cent to 2.5 per cent," she said.

In another major boost for small companies, the government has proposed to revise the definition under the Companies Act, 2013 for small companies by increasing their thresholds for paid up capital from not exceeding Rs 50 lakh to not exceeding Rs 2 crore and turnover from not exceeding Rs 2 crore to not exceeding Rs 20 crore.

As per the minister, the move would benefit more than two lakh companies in easing their compliance requirements.