{"id":70972,"date":"2020-10-05T15:29:35","date_gmt":"2020-10-05T09:59:35","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=70972"},"modified":"2020-11-26T15:31:34","modified_gmt":"2020-11-26T10:01:34","slug":"insolvency-and-bankruptcy-code-ibc-2016","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/insolvency-and-bankruptcy-code-ibc-2016\/","title":{"rendered":"Insolvency and Bankruptcy Code (IBC 2016)"},"content":{"rendered":"<p><strong>Source:<\/strong>\u00a0<a href=\"https:\/\/www.thehindu.com\/todays-paper\/tp-opinion\/transforming-business-and-the-insolvency-system\/article32768623.ece\">The Hindu<\/a><\/p>\n<blockquote><p><strong>Syllabus:<\/strong>\u00a0Gs3:\u00a0<strong>Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment<\/strong><\/p><\/blockquote>\n<p><strong>Background<\/strong>: The Prime Minister mentioned that Insolvency and Bankruptcy Code (IBC 2016) would help aid India\u2019s path to self-reliance.<\/p>\n<p><strong>What are the issues hindering investments in India?<\/strong><\/p>\n<ul>\n<li><strong>Backlog in court cases<\/strong>: nearly four crore matters pending final judgment.<\/li>\n<li><strong>The enforceability of contracts:<\/strong>\u00a0On an average, it takes 1,445 days for a contract to be enforced, and that too at a cost of nearly 31% of the claim value.<\/li>\n<li><strong>Criminal penalties:<\/strong>\u00a0imprisonment for minor offences act as major deterrents for investors.<\/li>\n<\/ul>\n<p><strong>What is the importance\u00a0 of IBC in promoting investment climate in India?<\/strong><\/p>\n<ul>\n<li>Replaced the inefficient bankruptcy law regime.<\/li>\n<li>It has transformed insolvency resolution in India by streamlining insolvency processes in a sustainable, efficient, and value retaining manner.<\/li>\n<li>It focuses on prioritising resolution rather than liquidation.<\/li>\n<li>Relatively short time-bound processes. With IBC in place, the overall time taken in recovery improved nearly three times. (4.3 years in 2018 to 1.6 years in 2019).<\/li>\n<li>It has successfully instilled confidence in the corporate resolution methodology.<\/li>\n<li>Increased the possibility for the creditors in recovering some of their investments in firms being liquidated. With IBC in place, the recovery rate improved nearly threefold (26.5% in 2018 to 71.6% in 2019).<\/li>\n<li>Beside promoting investor and investee confidence it has allowed credit to flow more freely to and within India.<\/li>\n<li>IBC reforms improved the ease of doing business in India that resulted in increased Foreign Direct Investment into India during 2019-2020.<\/li>\n<li>Instilled greater confidence in both foreign and domestic investors. It will help in enabling India to emerge as a \u2018Make for World\u2019 platform.<\/li>\n<\/ul>\n<p><strong>What are the other steps taken by government to promote investments?<\/strong><\/p>\n<ul>\n<li>Government of India is working toward decriminalisation of minor offences which will significantly reduce the risk of imprisonment for actions that are not necessary.<\/li>\n<li>The rolling out of the commercial courts, commercial divisions and the Commercial Appellate Divisions Act, 2015, to resolve pending cases<\/li>\n<li>The removal of over 1,500 obsolete and archaic laws.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Source:\u00a0The Hindu Syllabus:\u00a0Gs3:\u00a0Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment Background: The Prime Minister mentioned that Insolvency and Bankruptcy Code (IBC 2016) would help aid India\u2019s path to self-reliance. What are the issues hindering investments in India? Backlog in court cases: nearly four crore matters pending final judgment. The&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/insolvency-and-bankruptcy-code-ibc-2016\/\">Continue reading <span class=\"screen-reader-text\">Insolvency and Bankruptcy Code (IBC 2016)<\/span><\/a><\/p>\n","protected":false},"author":10311,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[1302],"class_list":["post-70972","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","tag-eco_7","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704668835},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/70972","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10311"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=70972"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/70972\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=70972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=70972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=70972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}