Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
3) Do you think Insolvency and Bankruptcy Code can emerge as the lynchpin for resolving stressed assets in a time-bound manner? Critically analyse. (250 words)
Why this question:
The Central government introduced the Insolvency and Bankruptcy Code (IBC) in 2016 to resolve claims involving insolvent companies. This was intended to tackle the bad loan problems that were affecting the banking system. Two years on the IBC has succeeded in a large measure in preventing corporates from defaulting on their loans. The IBC process has changed the debtor-creditor relationship.
Demand of the question:
The answer must analyse in detail the merits and demerits of Insolvency and Bankruptcy Code (IBC).
Directive word:
Critically analyze – When asked to analyse, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a fair judgement.
Structure of the answer:
Introduction
Define the basic features of Insolvency and Bankruptcy Code (IBC).
Body
Explain that Insolvency and Bankruptcy Code, 2016 is considered as one of the biggest insolvency reforms in the economic history of India.
This was enacted for reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of the value of assets of such persons.
Then discuss the objectives of the IBC, explain the key aspects, the successes, challenges in implementation etc.
Conclusion
Conclude with way forward.
