Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
4. Explain the key features of Insolvency and Bankruptcy (Amendment) Bill 2020 and also analyse its significance. (250 words)
Reference: Indian Express
Why the question:
The article examines the Pre-packaged Insolvency Resolution Process (PIRP), how it differs from the Corporate Insolvency Resolution Process (CIRP) and key hurdles that the new mechanism may face in gaining traction.
Key Demand of the question:
Discuss the key features of the Bill and analyse its significance.
Directive:
Explain – Clarify the topic by giving a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.
Structure of the answer:
Introduction:
Start with what the Bill is about.
Body:
The answer body must have the following aspects covered:
Discuss first the Pre-packaged Insolvency Resolution Process (PIRP), how it differs from the Corporate Insolvency Resolution Process (CIRP) and key hurdles that the new mechanism may face in gaining traction.
A pre-pack entails the resolution of the debt of a distressed company through a direct agreement between secured creditors and the existing owners or outside investors instead of a public bidding process.
Explain all the key features in detail. Discuss what the benefits of pre-packs are over the Corporate Insolvency Resolution Process (CIRP).
Elaborate upon the pros and cons.
Conclusion:
Conclude with way forward.
