IBC process needs to speed up; private investment may remain muted

According to the Survey, resolution under IBC has been much higher as compared to other processes.

With the Insolvency and Bankruptcy Code (IBC) entering its third year of operation, total realisable value through the process at the end of December 2019 stood at Rs 1.58 trillion. The Economic Survey says although the implementation of IBC is making slow progress, risk aversion of banks to lend further may not reduce unless it speeds up.

Therefore, risk premiums could continue to be high and cuts in repo rates not transmit to lowering lending rates. Private investment could, therefore, remain muted, it said. 

The IBC process has contributed in reducing the non-performing assets (NPA) of the banking sector from 11.2 per