Page 27 - Banking Finance February 2023

ARTICLE

aspiring entrepreneurs have got framed into insolvency, employees and remaining 2.65 Crore (24%) are females.
coercing them to shut down their businesses. Finance and
Corporate Affairs Minister Madam Nirmala Sitharaman had
Why the concept of PPIRP is needed?
issued a draft of the Insolvency and Bankruptcy Code
Here I would like to quote a famous line that says- "A
(Amendment Bill), 2021.
person's true strength will be known in his revival, not in his
survival".
In this article we will be going through with the basic facts
& figures of MSME followed by an overview of this so called
As this says that A person's or rather we can corelate over
concept of PPIRP on the parameters of WHY this is required
here with a Business Unit as it is been driven by a HUMAN
and for WHAT reasons we needed an PPIRP concept and
touch - so here we can say that "A Business Unit true
entire gambit of HOW this PPIRP works along with detailed
strength will be known in its revival, not in its mere survival".
Mechanism. Towards last Challenges ahead in probable
times will be covered and ending with WAY FORWARD.
In the continuation of the quest of WHY, it is very much
pertinent to have view on what is happening across the
Facts & figures about MSME: world , where some countries/ areas are already having this
As MSME is centre of attraction of this whole mechanism, PPIRP type concept namely -the system of PPIRP has been
let us have a glance about MSMEs. famously advertised as an insolvency resolution mechanism
by the United Kingdom and European contingents over the
The MSMEs in India are playing a crucial role by providing past decade.It is the same procedure being forwarded
large employment opportunities at comparatively lower worldwide.The concept got instilled in India after its
capital cost than large industries as well as through successful implementation and sustainability in the global
industrialization of rural & backward areas, inter alia, scenario. The common call across the international column
reducing regional imbalances, assuring more equitable is to delineat its attention towards the transparency of the
distribution of national income and wealth. It was recorded PRIRP
that the contribution of MSME segment in GDP which is
approximately 30.27 Share of MSME in All India GDP. As per Let's dive more into the background:
the National Sample Survey (NSS), conducted by National
In June 2020, the Government constituted a sub-committee
Sample Survey Office, Ministry of Statistics & Program
of the ILC (Insolvency Law Committee) under the
Implementation during the period 2015-16, there were 6.33
chairmanship of Dr. M. S. Sahoo, Chairperson, IBBI
Crore unincorporated non-agriculture MSMEs in the country
(Insolvency and Bankruptcy Board of India) to make
engaged in different economic activities 1.97 Crore in
recommendation on the pre-pack insolvency resolution
Manufacturing, 0.03 Lakh in Non-captive Electricity
process (PPIRP).
Generation and Transmission, 2.30 Crore in Trade and 2.07
Crore in Other Services.
The said sub-committee of the ILC had submitted its Report
Also the survey says that MSME sector has been creating
11.10 crore jobs (majorly in Trade related then followed by
Other Services and Manufacturing areas) in the rural and
the urban areas across the country.

Micro sector with 6.31 Crore estimated enterprises provided
employment to 10.76 Crore persons that in turn accounts
for around 97% of total employment in the sector. Small
sector with 3.31 lakh and Medium sector with 5000
estimated MSMEs provided employment to 31.95 lakh
(2.88%) and 1.75 lakh (0.16%) persons of total employment
in MSME sector, respectively. Out of 11.10 Crores
employees in MSME sector, 8.45 Crore (76%) are male

BANKING FINANCE | FEBRUARY | 2023 | 23