Litigation turning out to be a big hurdle for IBC: Economic Survey

Cites World Bank's Ease of Doing Business report, which said it takes 1,445 days to resolve a commercial contract in India, versus 589.6 days in OECD high income countries, 120 days in Singapore

Dev Chatterjee Mumbai
gavel, IBC, Insolvency, bankruptcy, court, judgement, laws

Despite the IBC being introduced in 2016 and first 12 companies were sent for debt resolution in June 2017, some of the large accounts like Bhushan Power are still pending in the court due to litigation

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).  

Also Read

GDP growth, fiscal deficit: Economic Survey nos in line with expectations

Economic Survey pegs India's real economic growth in 2021-22 at 11%

Full text of the Economic Survey 2020-21: Download volume-I and II here

Economic Survey 2020-21 endorses continuation of expansionary fiscal stance

LIVE: India took 'short-term pain' for long-term economic gain, says CEA

Budget Byte: Healthy corporate profits may help improve govt spending

There should be discussion, presentation of views in Parliament: Modi

Exporters urge FM to increase R&D spends, reduce taxes in budget

FM gave four-five mini-budgets in 2020, upcoming will be part of it: Modi

From tax exemptions to jobs, here's what Indians expect from Budget 2021

First Published: Jan 29 2021 | 5:40 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on are available only to BS Premium subscribers. Already a BS Premium subscriber?LOGIN NOW

Register to