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Islamabad: India’s 2016 bankruptcy laws, which were presented as reforms to speed up business resolution and increase recoveries, have exposed the Modi government’s economic mismanagement.<\/p>\nIslamabad: India’s 2016 bankruptcy laws, which were presented as reforms to speed up business resolution and increase recoveries, have exposed the Modi government’s economic mismanagement.<\/p>\n
According to Kashmir Media Service, The Economist (October 16, 2025) reported the code has delivered only partial success, failing to meet its objectives of faster resolutions and higher recoveries. Of the 8,000 firms enrolled in the insolvency program, just over 60 percent were resolved, while a staggering three-quarters of cases exceeded the 270-day legal deadline, and recoveries averaged a paltry 32 percent \u2014barely a third of the owed amounts.<\/p>\n
Systemic inefficiencies and bureaucratic dysfunction have crippled the process. Insolvency admissions can take up to two years, despite clear provisions for defaults over $113,600. Courtrooms remain cramped and dysfunctional, plagued by broken air-conditioning, insufficient seating, and outdated infrastructure, making justice slow and inaccessible.<\/p>\n
Judicial incompetence further compounds the crisis. Many courts are staffed with retired bureaucrats instead of industry professionals, resulting in slow, error-prone, and sometimes corrupt decisions. Procedural lapses are common, as highlighted by the Supreme Court\u2019s May 2025 reversal of JSW Steel\u2019s takeover ruling, which drew industry criticism. The lack of technical and industry expertise in courts has created an environment hostile to efficient insolvency resolution.<\/p>\n
The insolvency machinery itself is glacial. 78 percent of 1,900 ongoing cases now exceed the 270-day legal deadline, up from 68 percent last year, while outdated bidding terms make genuine investment opportunities economically unviable. Even voluntary liquidations, with clean documentation, drag on for around 4.3 years, of which nearly three years are lost in government clearances, highlighting bureaucratic bottlenecks and administrative inertia.<\/p>\n
Government red tape exacerbates delays, as approvals and procedural hurdles prevent timely business closures. The result is a slow-motion crisis where firms linger in uncertainty, investors are deterred, and India\u2019s global economic credibility erodes.<\/p>\n
The Economist editorial bluntly states: \u201cIndia\u2019s bankruptcy laws are hobbling the country.\u201d Far from fostering economic growth or corporate efficiency, the Modi government has overseen a system plagued by judicial delays, bureaucratic lethargy, procedural errors, and systemic inefficiency, exposing its failure to govern effectively and casting doubt on its ability to manage India\u2019s economic future.<\/p>\n","protected":false},"excerpt":{"rendered":"
Islamabad: India’s 2016 bankruptcy laws, which were presented as reforms to speed up business resolution and increase recoveries, have exposed the Modi government’s economic mismanagement. According to Kashmir Media Service, The Economist (October 16, 2025) reported the code has delivered only partial success, failing to meet its objectives of faster resolutions and higher recoveries. Of …<\/p>\n","protected":false},"author":3,"featured_media":185943,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-185942","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-special-reports"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t