10,113 companies voluntarily ceased operations between April-20. ’21: Ministry

More than 10,000 companies were voluntarily shut down in the country from April 2020 to February this year, a period when the coronovirus epidemic and subsequent lockdown significantly disrupted economic activity.

The latest data available with the Ministry of Corporate Affairs (MCA) showed that a total of 10,113 companies were closed under Section 248 (2) of the Companies Act, 2013 in the current financial year till February.

Section 248 (2) implies that the companies closed their businesses voluntarily and not due to any punitive action.

In a written reply to a question in Lok Sabha on 8 March, Minister of State for Corporate Affairs Anurag Singh Thakur said that the ministry does not keep any record of companies that have gone out of business.

“During the year 2020-21 (from the month of April 2020 to February 2021) a total of 10,113 numbers of companies have been exempted under Section 248 (2) of the Act. MCA has not conducted any campaign to strike against the companies during 2020-21.

According to the ministry’s data, a total of 2,394 companies were closed in Delhi compared to 1,936 companies in Uttar Pradesh.

Tamil Nadu and Maharashtra closed 1,322 and 1,279 companies respectively during this period.

In Karnataka, 836 companies closed voluntarily, compared to 501 in Chandigarh, Rajasthan (479), Telangana (404), Kerala (307), Jharkhand (137), Madhya Pradesh (111) and Bihar (104).

Number in other states and union territories: Meghalaya (88), Orissa (78), Chhattisgarh (47), Goa (36), Pondicherry (31), Gujarat (17), West Bengal (4) and Andaman and Nicobar (2 )), Data shown.

This data was provided in response to a question asked by a member seeking state-wise details of the number of registered companies that went out of business during the year 2020-21.

In the wake of the epidemic, the central government implemented a nationwide lockout in late March 2020 to curb the spread of coronovirus infection and began loosening the restrictions in May. In the following months, several states banned the movement amid an increase in COVID-19 cases.