The article advocates for the scrapping of the Insolvency and Bankruptcy Code (IBC) 2016, arguing it is flawed and detrimental to the Indian economy. Key points include:
Ineffectiveness in Recovery: The IBC has failed to effectively recover bad debts, with a low recovery rate that falls short of expectations.
Erosion of Value: The resolution process under IBC often leads to significant value erosion of the assets involved, harming creditors.
Lengthy and Costly Process: The IBC process is criticized for being time-consuming and expensive, burdening businesses and the judiciary.
Negative Impact on Credit Flow: The IBC has disrupted the credit flow to the economy, as banks become more risk-averse due to the possibility of lengthy insolvency proceedings.
Encouragement of Crony Capitalism: The code has allegedly facilitated the takeover of valuable assets by a few entities at low prices, leading to concerns about crony capitalism.
The article concludes that the IBC should be scrapped in favor of a more effective and equitable system for resolving insolvency and bankruptcy issues.
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