‘Conflict between probe agencies, NCLT to be resolved soon’

Our Bureau New Delhi | Updated on October 24, 2019

Finance Minister Nirmala Sitharaman at a press conference in New Delhi on Thursday   -  -

Ease of doing biz: Top 50 ranking is our target, says Sitharaman

Finance Minister Nirmala Sitharaman has assured that a solution will be found soon to resolve conflict between Company Law Tribunals and the probe agencies such as Enforcement Directorate (ED) in insolvency related matters.

This assurance has come at a time when the Enforcement Directorate (ED) questioned the jurisdiction of National Company Law Tribunal (NLCT) in the matter related with attachment of properties of Bhushan Steel & Power against which insolvency and bankruptcy proceeding is going on.

In fact, the ED said that the NCLT does not have jurisdiction to tell it that it can’t attach assets of the company. Experts believe that there is already delay in adopting resolution on one ground or the other, the probe agencies are further delaying the process.

“I am conscious of the fact that the ED does its duty, does its job and when it comes to the question of attaching such properties of people who are being pursued under the PMLA (Prevention of Money Laundering), some of their company properties are also getting attached. I have had meetings with both the Revenue Secretary as well as the Corporate Affairs Secretary. We are applying our mind on it. Let’s see how I will resolve it. We recognise there is an issue,” Sitharaman said while addressing a press conference here to present Government’s views on World Bank’s report of Ease of Doing Business (EoDB).

India’s rank has improved 14 ranks to 63 and one of key factors contributed most is the resolving insolvency. The government claims that time taken in resolving insolvency in now comparable to OECD countries. Recovery rates in case of insolvency improved to 71.6 per cent in 2019 against 26.5 per cent 2018. Time taken for resolving insolvency has improved to 1.6 years from 4.3 years.

Since December 1, 2016 and till June 2019, 2,162 corporate insolvency resolution processes have been admitted. Of these, 174 have been closed on appeal or review or settled. 101 have been withdrawn, 475 have been ended in liquidation and 120 have ended in approval of resolution plans. All these helped to improve the ranking.

“I am extremely happy. Of course, that doesn’t make us complacent,” the Minister said while adding that effort would to improve further along with other indicators. The government has set a target in achieving EoDB ranking within top 50. For this the government will focus not just on three areas where it is lagging but also on the seven areas it has improved.

Among the areas where more improvement is required is paying taxes. Taxes here mean direct taxes (Income Tax and Corporate Tax) and indirect taxes (GST and Custom Duty). Sitharaman said that improving the GST regime is a continuous process.

Published on October 24, 2019

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