Speed Post News Network
New Delhi : Union Finance and Corporate Affairs Minister Arun Jaitley said that the scattered regime prior to the enactment of the Insolvency and Bankruptcy Code (IBC), 2016, had impacted the domestic private investment with over capacities in certain sectors coupled with unacceptably high levels of Non-Performing Assets (NPAs) in the banking system hindering growth.
To address these concerns, the Finance Minister said, this Government not only enacted the Code expeditiously, but also has been implementing it at an unprecedented pace. It was anticipated that in the initial days, there would be some teething troubles. He said that the Government is addressing these troubles on priority. Despite the initial difficulties, the outcome from implementation of the Code has been better than the anticipated. The process is governed by the Rules and Regulations and the Government maintains an arms’ length distance from the process and has no favourites.
Jaitley was addressing through Video Conferencing the conference on ‘Insolvency and Bankruptcy Code – A New Paradigm for Stressed Assets’ organised in New York, USA, on December 5, 2018, by the Insolvency and Bankruptcy Board of India (IBBI) jointly with the Consulate General of India, New York.
Jaitley said that the only downside has been that in some of the cases because of appeals and counter-appeals and litigations, the process has got somewhat delayed. But then the Supreme Court has stood-up to the occasion. While referring to the regrettable phenomenon of unwillingness of the debtors to repay the debts in the past, Jaitley emphasised that the Code has significantly changed the lender-borrower relationship in India. He said that a very large number of debtors who fear that they are about to touch or cross the red line after which they will be in the NCLT (National Company Law Tribunal) are now refraining themselves from becoming defaulters.
Jaitley further said that unquestionably, it has now been established over the last few years that India is a fast-growing economy faster than some of its contemporaries amongst the emerging economies and India, over the next decade or so, is likely to maintain this high growth rate of at least 7-8 per cent.
Highlighting the investment opportunities emerging from the processes under the Code, Jaitley stated that given the future potential of the Indian economy, and the fair process followed under the Code, it is a great opportunity for investors who are seriously thinking about investing in India. Noting the number of Corporate Debtors undergoing Resolution, the Minister stated that the number of assets that are available for take-over through the Code is extremely large.
Dr M S. Sahoo, Chairperson, IBBI, touched upon the key features of the new regime which provides for a market mechanism for resolution of insolvency, wherever possible, and exit, wherever required, according to a PIB release.