Finance Minister Nirmala Sitharaman has said that minor technical and procedural defaults under the Companies Act will be decriminalized.

Addressing a press conference on Sunday, Sitharaman announced that majority of compoundable offences sections to be shifted to Internal Adjudication Mechanism (IAM).

Compoundable offences can now be tried under internal adjudicating mechanisms. The amendments in the Companies Act will de-clog criminal courts and NCLT, said Sitharaman.

The decriminalized violations include shortcomings in CSR reporting, inadequacies in board reports, filing defaults, and delay in holding of annual general meetings. Further, the government will drop seven compoundable offences and five offences will be dealt with under an alternative framework.

The minister also announced that the no fresh insolvency case will be admitted for the next one year in view of the coronavirus pandemic.

The Finance Minister further said that the government will also set up a special insolvency framework for MSMEs under Section 240A of the Insolvency of Bankruptcy Code.

"The threshold for insolvency will also be raised to Rs. 1 crore from the current Rs. 1 lakh which will be supportive for the MSME sector", she added.