GS3 (Indian economy)

There has been a lot of discussion about the importance of the bankruptcy law and the need to facilitate exit in the Indian economy. Why was the bankruptcy law important and what are the benefits of an easy exit for the economy?

(Aspirants are advised to read the second chapter of the 2015-16 Economic Survey if they are unfamiliar with the topic)

Best answer

Avinash Y wrote the best answer for this question and got a score of 4.5/10 (as the best answer is an image, it cannot be uploaded here, hence scroll down to see those)