Abstract:
The current Indian framework for corporate insolvency resolution, is fraught with deficiencies in the
laws, their procedures, their implementation as well as in the capacity of the institutions supporting
them. The absence of a coherent and effective mechanism for resolving corporate insolvency has
resulted in poor economic outcomes. The origin of the complex framework characterised by multiple,
fragmented laws, can be traced back to the history of its evolution. In this paper, we describe the
evolution of the corporate insolvency resolution framework, with the objective of linking it back to the
policy directive of the time. We conclude that when policy adopts a piecemeal approach focusing on
solving only a part of the complex problem, one at a time, it most often leads to inefficient outcomes on
the overall objective. We end with a brief description of the Insolvency and Bankruptcy Code (IBC),
2016 which is most recent policy initiative in this field. The IBC is a clean, modern law that offers a
simple, coherent answer to the insolvency resolution problems under current Indian conditions. Once
implemented, the law will potentially change not only the manner in which insolvency is resolved in
India but also the entire credit landscape of the country
