The Economic Survey has said the Insolvency and Bankruptcy Code (IBC) is facing serious hurdles due to litigation initiated by various parties, adding that there is a need for efficient legal systems. The Survey said the court system remains the single most important way for ex-post resolution and the performance in the area of dispute resolution and contract enforcement in India remains a concern and needs to be focused on.
The Survey cited the World Bank’s Ease of Doing Business report (2020), which said it takes 1,445 days to resolve a
commercial contract in India as compared to 589.6 days in OECD high income countries and 120 days in Singapore. The report also shows that the cost of litigation in India is around 31 per cent of the claim value. This is significantly higher than in OECD countries (21 per cent) and Bhutan (0.1 per cent).
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