New Delhi, May 12 (KNN) The Rajya Sabha has passed the the major economic reform Bill moved by the Government i.e. ‘Insolvency and Bankruptcy Code, 2016’.

The objective of the new law is to promote entrepreneurship, availability of credit, and balance the interests of all stakeholders by consolidating and amending the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner and for maximization of value of assets of such persons and matters connected therewith or incidental thereto. 

Reacting to this, eminent Economist Bharat Bhushan told KNN, “In general, it is in favour of the country because it would stop the companies who fly by nights. And industry especially the banks will be benefited by it.  Their motive is only that if somebody runs away after showing bankruptcy, he cannot do other business as well.”

Akash Jindal, Economist, said, “If any company needs to be winded up it can be done easily.

Earlier the winding up procedure of a failed company was too long but now it is easy. There is a need for easy way to return the investors’ money. This law is not motivating the people to get bankrupt. There should be a solution if somebody fails in business to return the money of investor.

Passage of bankruptcy bill is a perfect example of constructive cooperation in the parliament towards economic progress”, said Harsh Neotia, President, FICCI.

“Bankruptcy Act is a much needed legislation for industry that would greatly help resolve issues pertaining to speedy winding up of insolvent companies, lowering NPAs, and redeployment of capital productively”, added Neotia.

The law aims to consolidate the laws relating to insolvency of companies and limited liability entities (including limited liability partnerships and other entities with limited liability), unlimited liability partnerships and individuals, presently contained in a number of legislations, into a single legislation. Such consolidation will provide for a greater clarity in law and facilitate the application of consistent and coherent provisions to different stakeholders affected by business failure or inability to pay debt. (KNN Bureau)

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