Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
From UPSC perspective, the following things are important:
Prelims level: Particulars of the IBC.
Mains level: Recommendations by the Insolvency Law Committee.
Recommendations for the Insolvency and Bankruptcy Code (IBC)
- The insolvency law committee has recommended that the Insolvency and Bankruptcy Code (IBC) be amended
- Why: to make eligibility requirements for bidders stricter and give lenders more flexibility in decision-making, said two people aware of the developments
- These recommendations given below, require parliamentary approval to come into effect
- The panel has recommended amendments to Section 29A of the IBC, which bars wilful defaulters, those with non-performing assets for over a year and people connected to these parties from bidding for stressed assets
- The panel has suggested a change in the definition of connected party to include a person who along with a resolution applicant picks up an equity stake in the company facing insolvency
- The panel has also recommended allowing promoters of medium, small and micro enterprises to submit resolution plans, provided they are not classified as wilful defaulters
- The other recommendation is to bring homebuyers on a par with unsecured financial creditors, giving them a greater say in insolvency proceedings
Insolvency and Bankruptcy Code