As many as 3,638 companies have closed down in the country in the first three months (April-June) of the current financial year of FY22 (2021-22), the government has informed Parliament.
These companies have been struck off the official Register of Companies under section 248 (2) of the Companies Act, 2013 according to data given by Minister of State for Commerce and Industries Som Prakash. Prakash quoted figures provided by the Ministry of Corporate Affairs (MCA) in a written reply in the Lok Sabha on July 28.
In the previous financial year of FY21 over 10,000 companies have been struck off, as reported by Moneycontrol earlier, mostly due to financial stress brought on by the Covid-19 pandemic. According to MCA's official statistics, as many as 68,463 companies closed down in FY20.
However, the government has consistently maintained that the MCA does not maintain any record of the companies which have gone out of business as this is not defined in the provision of the Companies Act, 2013.
Companies can be struck off the register for various reasons. Section 248(2) of the Act provides the Registrar of Companies with powers to remove a company from the records if they fail to start operations within one year of registration or fail to show any operation for the two immediately preceding financial years.
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The government listed out all the actions taken to boost job creation and business growth in the country in the wake of the Covid-19 pandemic. This includes the earliest of announcements from May 13, 2020, when the Rs 3 lakh crore Emergency Working Capital Facility for businesses was announced, a new definition of MSMEs was brought in and Employees Provident Fund Support for business and organised workers was extended for 3 months.More recent reforms were also highlighted in Parliament such as announcements made on June 28, 2021, which include the Rs 1.1 lakh crore loan guarantee scheme for COVID-affected sectors, additional Rs 1.5 lakh crore for Emergency Credit Line Guarantee Scheme, Credit Guarantee Scheme to facilitate loans to 25 lakh persons through Micro Finance Institutions (MFIs) and extension of Aatma Nirbhar Bharat Rozgar Yojana till March 31, 2022.