New Delhi, Jan 31 (PTI) The average time taken for resolution of cases under the insolvency law is 340 days compared to the previous regime when the process took around 4.3 years, according to the Economic Survey.
The Insolvency and Bankruptcy Code (IBC), which came into force in 2016, provides for market-linked and time-bound resolution of stressed assets.
The survey, tabled in the Parliament on Friday, also said resolution under the Code has been much higher as compared to other processes.
Citing data provided in the report on Trend and Progress of Banking in India 2018-19, the survey said the amount recovered as a percentage of amount involved in 2017-18 and 2018-19 has been much higher as compared to Lok Adalat and Debt Recovery Tribunals (DRTs), among others.
"The Code provides a timeline of 330 days to conclude a CIRP (Corporate Insolvency Resolution Process). This push has meant that proceedings under the Code take on average about 340 days, including time spent on litigation, in contrast with the previous regime where processes took about 4.3 years," it noted.
An official release on Friday said the survey highlights that the Code has improved resolution processes in India compared to the earlier measures.
"The IBC proceedings take 340 days on an average compared to 4.3 years earlier and resulted in recovery of 42.5 per cent amount involved compared to 14.5 per cent under SARFAESI Act," it said.
Up to September 2019, about 743 corporates have completed the CIRP yielding either resolution or liquidation and 498 corporates have commenced voluntary liquidation process.
"Out of the 562 CIRPs initiated in October-December 2019, 132 are under liquidation, and 14 have been already settled... As on end December 2019, Rs 1.58 lakh crore were realisable in cases resolved," the survey said, citing data from the Insolvency and Bankruptcy Board of India (IBBI).
As per the survey, the government has been proactively addressing the issues that come up in implementation of the reform. Since its enactment in 2016, the Code has been amended three times, mainly to streamline the processes and address any lacuna to ensure proper operationalising of the provisions. PTI RAM RVK