Revamped insolvency code, relief for SEZs in reforms roll-out: Sitharaman

NEw new delhi : The authorities’s reclaim state testament see a slew of actions in next couple of months, such as structural overhaul of the Insolvency and Bankruptcy Code (IBC), a one-time relief to special economic zones (SEZs), new elements in the ₹2 lakh crore special assistance to states and a people-friendly income-tax law, Union finance minister Nirmala Sitharaman said on Monday.A day after presenting the Union Budget, she said the government is all set to introduce the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 in the second half of the Budget session beginning March 9. The bill proposes the next generation of IBC reforms. Experts said the legislation aims to reduce resolution timelines, empower creditors, enhance roles of insolvency professionals and introduce a new creditor-initiated insolvency resolution process. A parliamentary committee has already submitted its report on the bill in December 2025.“I expect, subject to conditions, to table the Insolvency and Bankruptcy Code (Amendment) Bill in the second half of the Budget session,” Sitharaman said at a post-budget media interaction on Monday.She also holds the portfolio of the ministry of corporate affairs. The government introduced the bill in the Lok Sabha in August last year. Sitharaman said that the budget proposal allowing eligible manufacturing units in SEZs to sell in domestic tariff areas (DTAs) is a one-time, temporary measure because of global trade disruptions. The government will frame rules in such a manner that it would not hit the DTA players, she said.A senior government official, who did not wish to be named, said that units of SEZ will remain exporters. But due to global headwinds, they would be able to sell in DTA by paying customs duty at concessional rates.According to him, rates will be determined in such a manner that it would not put units in DTA at any disadvantage. “There will be a level playing field between units of SEZs and DTAs. And the facility will be available for a limited time,” he said.The government will make necessary regulatory changes to this effect which will also specify quantities of sales by SEZs in DTAs, he said.According to him, the government is working on a simplified and technology-driven system of income-tax that aims to make the lives of taxpayers easy. “After trials, the system will be rolled out on April 1,” he said.In her budget speech on Sunday, the finance minister had said, “In July 2024, I announced a comprehensive review of the Income Tax Act, 1961. This was completed in a record time and the Income Tax Act, 2025 will come into effect from 1st April, 2026.”Speaking about enhanced budget allocation Special Assistance to States for Capital Investment (SASCI) scheme, the finance minister said the government may add some new reform priorities to nudge states. The government raised the budget estimate (BE) for the SASCI scheme from ₹1.5 lakh crore in FY26 to ₹2 lakh crore in FY27, a 33.3% jump. Under the scheme, the Centre extends 50-year, interest-free loans to states for capital investments.The SASCI scheme was launched after the Covid pandemic to boost the economy by nudging states for capital investments. Because of its efficacy that scheme continued and the Union Budget for 2025-26 allocated an outlay of ₹1.5 lakh crore for the 50-year interest free loans to states for capital expenditure and incentives for reforms.Union minister of state for finance Pankaj Chaudhary on December 9 told the Rajya Sabha that the total amount released to various states under SASCI since its inception from the financial year 2020-21 to 2025-26 (till December 3, 2025) was ₹4,24,225.95 crore. The scheme — special assistance to states for capital expenditure — was first launched with a small corpus of ₹12,000 crore in 2020-21.