"Insolvency and Bankruptcy Code a crucial milestone in the economic reforms": PM Modi

India, which used to be regarded one of the “Fragile Five” nations, is now seen as a bright spot in the world economy, Prime Minister Narendra Modi said on Saturday, emphasising the importance of the Insolvency and Bankruptcy Code, which was introduced in 2016.

The seminar being held by the Insolvency & Professionals Council of India, titled “Rejuvenation of Economy under Insolvency Laws,” was noted by Prime Minister Narendra Modi.

PM Modi acknowledged the need to “even better” the insolvency regime in a letter he signed and sent to Dr. Adish C. Aggarwala, President of the International Council of Jurists, London, in preparation for the seminar that will take place in New Delhi on August 27.

Prime Minister Narendra Modi commended the initiative and stated, “It is particularly encouraging to note that this seminar is being attended by many legal luminaries, domain experts, and other stakeholders.”

The seminar’s discussions “will prove fruitful and provide a roadmap to make the insolvency regime even better,” the prime minister predicted.

“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 continued by saying that Amrit Kaal represents the will of more than 140 crore people to create a developed, independent country. Self-reliance in India becomes a national ethos when individual desires are linked to the nation’s objectives.

The persistent Non-Performing Assets (NPA) issue in India, according to the seminar’s organiser, has gotten worse in recent years and is a factor in the nation’s economic slump.

“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.

(With agency inputs)