New Delhi: The ministry of corporate affairs (MCA) is working on increasing the recovery from its corporate insolvency process under the insolvency and bankruptcy code, said MCA secretary Manoj Govil at an event in New Delhi on Monday.
This aligns with the government’s plan to increase ease of doing business, Govil said. Ease of doing business includes setting up operations, conducting business, and winding up efficiently, he said.
The recovery rate in a corporate insolvency process refers to the amount of money recovered by creditors. An August 2023 analysis of 542 corporate insolvency procedures completed under the Insolvency and Bankruptcy Code, 2016 (IBC) showed the recovery rate was 30.8%.
Also read | Improve R&D for exports, ease of doing business, review tariffs on Chinese goods, industry leaders tell the FM
Govil said the MCA is also working on creating new accounting standards for limited liability partnerships (LLPs). He said MCA had reduced the insolvency resolution period to nearly three months on an average. Previously, a corporate insolvency procedure would take as much as two years, he said.
Economic Growth
Govil was speaking at the Institute of Chartered Accountants of India’s (ICAI) 75th anniversary event. Union minister for road transport and highways Nitin Gadkari was also present.
Gadkari highlighted the growth in the auto sector in India in his address. “When I first became the road transport and highways minister in 2014, India’s auto sector was worth ₹7.5 trillion. Today, ten years later, it is worth ₹15 trillion,” he said. “And all of you have a huge contribution in this growth,” he said to the chartered accounts in attendance.
The ICAI focused on explaining the drive for digitisation and incorporating new technologies in the profession at the event. It introduced a generative artificial intelligence (AI) feature for practising chartered accountants. ICAI president Ranjeet Kumar Agarwal said the organisation’s stance aligns with the government’s plan to make India a developed nation by 2047.
In his address, MCA secretary Govil said India is poised to become a 30 trillion dollar economy by 2047. India is an approximately 4 trillion dollar economy today, and growth in nominal gross domestic product (GDP) is expected to be about eight-fold, he said.