'Insolvency and Bankruptcy Code a crucial milestone in the economic reforms'

NEW DELHI: Stressing that the Insolvency and Bankruptcy Code, implemented in 2016, is a crucial milestone in the economic reforms, Prime Minister Narendra Modi on Saturday said that India, which used to be counted among the "Fragile Five" economies, is now being considered a bright spot in the global economy.

The Prime Minister took note of the seminar, titled, 'Rejuvenation of Economy under Insolvency Laws' being organised by Insolvency & Professionals Council of India.

In a signed message to Dr. Adish C Aggarwala, President of the International Council of Jurists, London, for the seminar, to be held in New Delhi on August 27, PM Modi acknowledged the need to make the insolvency regime "even better".

Taking note of the initiative, Prime Minister Narendra Modi, added "It is particularly heartening to note that this seminar is being attended by many legal luminaries, domain experts and other stakeholders". The Prime Minister said he was sure that the deliberations at the seminar "will prove fruitful and provide a roadmap to make the insolvency regime even better".

"India has pursued a human-centric approach to development, for true progress is always people-centric. Just a few years ago, India, which used to be counted among the "Fragile Five" economies, is now being considered a bright spot in the global economy" added the Prime Minister in the message to Dr. Aggarwala, who is also the President of Supreme Court Bar Association.

According to the Prime Minister, "One of the important reasons for the turnaround of the Indian economy has been the advent of several reforms and their thorough implementation in a coordinated manner by several institutions."

"When we speak of Ease of Doing Business, ease of winding up a business is also an important facet of the cycle. Since its enactment, the Insolvency and Bankruptcy Code has brought a paradigm shift in the insolvency regime in the country and is a crucial milestone in the economic reforms," Prime Minister Modi asserted in the message.

"Today, the health of our banking system is seeing new highs while the recovery of NPAs has been extremely encouraging. The sustained efforts by all stakeholders to get the process of resolving insolvency going smoothly has been an important contributor. It is the outcome of these dedicated and committed endeavours that the nation has massively improved its Ease of Doing Business," PM Modi wrote to Dr Aggarwala, who is also co-author of the Prime Minister's biographies with eminent British and American authors.

He added that Amrit Kaal reflects the resolve of more than 140 crore people to build a developed, self-reliant nation. When the hopes and aspirations of every citizen get connected with the nation's goals, self-reliant India becomes a national spirit. Meanwhile, the seminar's organiser said that India's persistent Non-Performing Assets (NPA) challenge has worsened in recent years, contributing to the country's economic slowdown.

"Although other factors, like rigorous tax enforcement, still impact the economy, resolving NPAs is pivotal for revitalising credit growth and investment," he said. "Previous mechanisms for NPA resolution, primarily established by the Reserve Bank of India and limited to banks, were suboptimal. With the aim of resolving the NPA crisis and enabling a smooth flow of credit within the economy in mind, the Insolvency and Bankruptcy Code (IBP) was enacted by the government in 2016," the organiser stated.