New Delhi, Mar 25 (PTI) Opposition members in the Lok Sabha criticised the Insolvency and Bankruptcy Code (IBC) on Wednesday, arguing it has failed to deliver timely resolutions due to tribunals’ limited capacity overburdened with cases, while BJP’s defended the 2016 law and accused the opposition of clinging to “license raj” mindsets from the Nehruvian and Indira Gandhi eras.
Participating in the debate on the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, which has been brought afresh based on the recommendations of a select committee of the lower house, opposition members also claimed that the code has become a tool to “rip” the assets of entities.
Hitting back at the opposition over criticism of the Insolvency and Bankruptcy Code (IBC), BJP MP Yaduveer Wadiyar said their viewpoint remains “stuck in that license raj era from Nehruvian time and the times of Indira Gandhi”, accusing them of opposing “a very important reform…just for the sake of opposition”.
The UPA era enforced suppressive economic policies that weakened the country’s banking system, he said.
“From 2014 onwards, our government has unclogged the system and undone much of the regressive policy that was done during that era, and the 2016 IBC was one such landmark policy that became the cornerstone of the Modi government’s progressive outlook, balancing regulation for a more free outlook and ease of doing business especially in our finance and banking sector,” Wadiyar said.
“I commend the government… for this proactive reboot of our nation’s insolvency framework. It has shifted India from an adapter’s paradise to a creditor-led system of accountability,” he said.
Senior BJP MP Anurag Thakur said the IBC has led to the recovery of over Rs 4 lakh crore in the last decade through the resolution of bankrupt companies. IBC is not a recovery mechanism but a revival and resurrection of the company, he noted.
TMC’s Saugata Roy claimed that the judiciary and the executive have both undermined insolvency resolution in the country. He said the National Company Law Tribunal (NCLT) has “limited capacity”, leading to delayed resolution of cases. He also alleged that the law on fugitive offenders was weak, thus, failing to serve its purpose.
D Prasad Rao of the TDP flagged delayed resolutions but said the amendments in the insolvency and bankruptcy law would ensure faster settlements.
K Veeraswamy of the DMK said that the insolvency code has become a tool to “rip” the assets of companies by finding flaws in the insolvency ecosystem. He also flagged delays by tribunals in settling disputes.
The government has been trying to resolve several challenges, including timelines of resolutions and liquidations, resulting in value deterioration, low realisations to creditors and capacity constraints at NCLT.
The select committee in its report has sought to address some of these key challenges relating to delays in resolution and liquidation, and low recovery rates.
The discussion concluded on Wednesday, and the government is likely to respond on Friday. PTI SID MR
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