"We will announce within this month a simplified exit scheme for defunct companies," Companies Affairs Minister Prem Chand Gupta said in an interview to PTI.
The objective is to not only simplify the complex and cumbersome exit scheme but also to reduce the burden of paper work on both the government and theindustry, he said.
"As of now industry spends about Rs 400 crore (Rs 4 billion) annually in compiling paper work under the Companies Law and the Registrar of Companies at various offices has to keep a record of 15 crore (150 million) documents," Gupta said.
As of now there are 6.4 lakh registered companies and about half of these are not operational for some reason or other and "we are giving them a chance to exit."
Under the proposed scheme, a promoter would have to give a self declaration before an 'oath commission' along with accounts of last three years for exit in case there were no assets or liabilities, he said.
The minister said he wanted to make the environment corporate friendly and as part of these efforts he was striving to provide a simple exit route as the earlier schemes were not giving desirable results "may be due to complex procedure".
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