The introduction of the Insolvency and Bankruptcy Code, 2016, five years ago, has proved to be the biggest insolvency reform in the economic history of India, which is validated by the time-bound resolution of insolvency processes of individuals, companies as well as government entities. The winding-up procedure is speedy and prompt action is being taken at the early stage of debt default itself, thereby resulting in an optimum recovery rate. The Code has also been able to address challenges arising out of the COVID-19 pandemic.
The business community has great expectations from IBC 2.0, as our recovery process picks up momentum. The Code would have to address additional issues arising out of COVID-19, such as the deterioration in value of companies, preference for liquidation rather than restructuring, tackling bankruptcy proceedings of real estate and construction, and consistent breach of deadlines and so on. There would also be need for efforts to make insolvency proceedings more seamless for all stakeholders including, MSMEs.