New Delhi:The government can give big relief to small borrowers by waiving debt.Under the Insolvency and Bankruptcy Code, the government can waive loans of small borrowers. All this can be done under the Fresh Start provisions of IBC. A plan is being prepared for this.
Corporate Affairs Secretary Injeti Srinivas said that the government is in talks with the microfinance industry to decide the category for waiver of small borrowers from EWS, the economically weaker section. He told that only the borrowers under the highest debt in EWS will get the benefit.At the same time, if someone takes advantage of this fresh start, then they will not be able to take advantage of it for the next five years. Srinivas said that this loan waiver will not exceed Rs 10,000 crore in four-five years across the country.
There are several types of provisions under Fresh Start of IBC. For example, the annual income of borrowers should not exceed Rs 60,000. The total value of his assets should not exceed 20,000. The total value of the loan on the beneficiary should not exceed 35,000. At the same time, the beneficiary should not even have his own residence, whether a petition has been filed against him under the IBC or not.