The Vice President of India, Shri M. Venkaiah Naidu, stated that the enactment of the Insolvency and Bankruptcy Code (IBC) is one of the key success stories of Indian economic reforms and has played a critical role in reshaping borrower behaviour.
He made these remarks while inaugurating the Insolvency Research Foundation (IRF).
Key Highlights of the Address
The Vice President noted that the IBC has enabled better renegotiation between lenders and borrowers and strengthened India’s financial system.
Quoting Insolvency and Bankruptcy Board of India (IBBI) data, he said that since 1 December 2016:
- Nearly 1,500 corporate debt cases have been admitted under the Corporate Insolvency Resolution Process (CIRP)
- 142 cases have been closed
- 63 cases withdrawn
- 302 cases resulted in liquidation
- 72 resolution plans have been approved
He emphasized that an effective insolvency framework is essential for financial stability, economic growth, and wealth creation. Without such a system, competing claims on distressed firms could lead to disorderly liquidation, even for viable businesses.
Importance of Insolvency Framework
The Vice President highlighted that:
- Insolvency laws encourage entrepreneurship and risk-taking
- They ensure efficient allocation and recycling of resources
- They prevent inefficient liquidation of otherwise viable companies
- Continuous research is required to improve insolvency laws
He also stressed the need for stronger collaboration between academia and industry in policy research.
Government Reforms
Shri Naidu appreciated the government’s economic reforms aimed at improving the investment climate and noted India’s progress in global ease of doing business rankings.
He said that since the introduction of the IBC in 2016, India has made significant progress in establishing a robust insolvency ecosystem.
Additional Data Shared
He further shared that:
- 1,322 cases were admitted by the National Company Law Tribunal (NCLT)
- 4,452 cases were disposed at the pre-admission stage
- 66 cases were resolved after adjudication
- 260 cases were ordered for liquidation
- Creditors recovered around ₹80,000 crore from 66 resolution cases
- Settlements worth approximately ₹2.02 lakh crore were recorded in pre-admission cases
- Additional recoveries of around ₹70,000 crore are expected from ongoing large cases
He also noted a decline in new non-performing assets (NPAs), indicating improved lending discipline.
Role of Insolvency Research Foundation (IRF)
The Vice President welcomed the establishment of IRF by the Indian Institute of Corporate Affairs (IICA) in partnership with the Society for Insolvency Practitioners of India (SIPI). He described it as an important step toward evidence-based policymaking in insolvency law.
He expressed hope that IRF will:
- Build a strong research ecosystem
- Develop global best practices adapted to India
- Support data-driven policymaking
- Train a cadre of scholars and experts in insolvency law
Conclusion
He concluded that insolvency reforms have strengthened India’s financial ecosystem and improved borrower discipline. He called for continued reforms supported by strong research institutions and industry participation through CSR initiatives.
