New Delhi: The Ministry of Corporate Affairs (MCA) is striving to enhance the recovery rate from corporate insolvency processes under the Insolvency and Bankruptcy Code, as stated by MCA Secretary Manoj Govil during an event in New Delhi on Monday.
This initiative is in line with the government’s efforts to improve the ease of doing business, Govil emphasized. Ease of doing business encompasses the efficient setup, operation, and closure of businesses, he added.
The recovery rate in corporate insolvency processes refers to the proportion of funds recuperated by creditors. An analysis conducted in August 2023 on 542 corporate insolvency procedures completed under the Insolvency and Bankruptcy Code, 2016 (IBC) revealed a recovery rate of 30.8%.
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Govil also mentioned that the MCA is developing new accounting standards for Limited Liability Partnerships (LLPs). He further stated that the insolvency resolution period had been reduced to approximately three months on average. Previously, such procedures could span up to two years, he explained.
Economic Growth
Govil delivered these remarks at the 75th anniversary event of the Institute of Chartered Accountants of India (ICAI). The Union Minister for Road Transport and Highways, Nitin Gadkari, was also in attendance.
Gadkari highlighted the remarkable growth of India’s automotive sector during his speech. “When I assumed the role of Minister of Road Transport and Highways in 2014, India’s automotive sector was valued at ₹7.5 trillion. Today, a decade later, it stands at ₹15 trillion,” he announced, giving credit to the chartered accountants for their significant role in this growth.
ICAI emphasized the push for digitalization and the integration of new technologies within the profession at the event. They introduced a generative artificial intelligence (AI) feature for practicing chartered accountants. ICAI President Ranjeet Kumar Agarwal stated that the organization’s objectives align with the government’s vision of transforming India into a developed nation by 2047.
In his address, MCA Secretary Govil projected India’s potential to become a $30 trillion economy by 2047. Currently, India’s economy stands at approximately $4 trillion, and the nominal gross domestic product (GDP) is expected to increase by eightfold, he added.
