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Asserting that the “early harvest” through the Insolvency and Bankruptcy Code (IBC) has been “extremely satisfactory”, Finance Minister Arun Jaitley has said that he expects 12 big cases such as Bhushan Power and Essar Steel to get resolved before the end of March, realising around ₹70,000 crore for creditors.
Both Bhushan Power and Essar Steel are at “advanced stages” of resolution, Jaitley said in his Facebook blog post titled Two Years of Insolvency and Bankruptcy Code.
So far, within two years of the IBC coming into being, 66 cases have been resolved, with creditors realising around ₹80,000 crore, Jaitley said.
Bhushan and Essar
While Bhushan Power had an outstanding debt of ₹47,000 crore, Essar Steel’s outstanding was ₹45,600 crore. Both were part of the Reserve Bank of India’s ‘dirty dozen’ list.
Jaitley’s remarks indicate that the government is quite confident that lenders can expect a resolution in the case of Bhushan Power and Essar Steel by March-end this fiscal.
The Finance Minister also said that an increase in the conversion of NPAs into standard accounts and a decline in new accounts falling into the Non-Performing Assets (NPA) category show a definite improvement in the lending and borrowing behaviour. He highlighted that the IBC has changed the debtor-creditor relationship and the creditor no longer chases the debtor.
“In fact, it is otherwise,” Jaitley said.
The Finance Minister also used his blog post to take a dig at the previous UPA government, stating: “The Congress left behind the legacy of an anachronic system of resolving commercial insolvency”.
High pre-admission disposals
Since the advent of the IBC, 1,322 cases have been admitted by the National Company Law Tribunal. As many as 4,452 cases have been disposed at the pre-admission stage and 66 have been resolved after adjudication. Liquidation has been ordered in about 260 cases.
In 66 resolution cases, the realisation by creditors was around ₹80,000 crore. As per NCLT data, in the 4,452 cases disposed of at the pre-admission stage, the amount apparently settled was around ₹2.02 lakh crore, Jaitley said.
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