New Delhi: Finance Minister Arun Jaitley on Monday tabled in the Lok Sabha the Insolvency and Bankruptcy Bill, 2015, proposing to enact a single bankruptcy code setting deadlines for processing insolvency cases.
Jaitley had announced this on Saturday, saying the government intends to bring important legislative measures on structural reforms during the remaining three days left of parliament’s winter session, notwithstanding the setback on the GST Bill.
The proposed law aims to reduce delays in resolution of insolvency cases and improve recoveries of amount lent to companies. The draft bill has proposed a timeline of 180 days, extendable by another 90 days, to resolve cases of bankruptcy. The new bankruptcy code will help India in the World Bank’s Ease of Doing Business ranking.
The current set of competing codes on the matter often results in the bankruptcy process dragging on for years, inflating costs for the parties concerned. At present, Asia’s third-largest economy has competing laws with unclear jurisdictions to deal with the liquidation or revival of companies.