Outcome From Insolvency and Bankruptcy Code Better Than Anticipated Says Finance Minister

The Union Minister of Finance and Corporate Affairs, 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 that 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 said further 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, the Finance Minister emphasized that the Code has significantly changed the lender-borrower relationship in India. Jaitley further 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.

The Minister noted 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 my own view is that India, over the next decade or so, is likely to maintain this high growth rate of at least 7-8%. 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. There can't be a better opportunity than the present one which is being offered through the Code. The Finance Minister stated that this is the right time and right place to be in India for these kinds of investments. 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.

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