![](/images/main_logo.png)
The objective of this blog is to supplement the information provided on the PRS website, with more analysis, information, that might be useful for readers. We expect to discuss issues about legislation and policy on some occasions and about the functioning of Parliament at other times. Interesting Parliament trivia will also find their place on the blog from time to time. The Parliament itself puts up significant amount of information on its website, making it relatively easy for anyone tracking the institution to access data. But what we at PRS have tried to do is to add value to the information that we have accessed from Parliament, and make our products even more relevant to users. We hope readers of this blog will share their views with us on a range of issues. We know that a number of people both in India and abroad use our website as a resource on legislation and Parliament. Our somewhat tentative beginning on Twitter (www.twitter.com/prslegislative) is now being followed more widely. Recent updates from Twitter will also be displayed on the Blog. The only way in which our legislation will become better over time is when lots of people like us scrutinise issues in detail, engage with our law makers and ensure that the process takes into account the inputs of citizens from across the country. As we prepare ourselves for the upcoming Budget session of Parliament, we expect to post on our blog quite regularly. We hope you will find this useful in the weeks and months ahead! Please spread the word about this new blog, and thank you for all your continued support.
The Insolvency and Bankruptcy Code, 2016 is listed for passage in Rajya Sabha today. Last week, Lok Sabha passed the Code with changes recommended by the Joint Parliamentary Committee that examined the Code.[1],[2] We present answers to some of the frequently asked questions in relation to the Insolvency and Bankruptcy Code, 2016. Why do we need a new law? As of 2015, insolvency resolution in India took 4.3 years on an average. This is higher when compared to other countries such as United Kingdom (1 year) and United States of America (1.5 years). Figure 1 provides a comparison of the time to resolve insolvency for various countries. These delays are caused due to time taken to resolve cases in courts, and confusion due to a lack of clarity about the current bankruptcy framework. What does the current Code aim to do? The 2016 Code applies to companies and individuals. It provides for a time-bound process to resolve insolvency. When a default in repayment occurs, creditors gain control over debtor’s assets and must take decisions to resolve insolvency within a 180-day period. To ensure an uninterrupted resolution process, the Code also provides immunity to debtors from resolution claims of creditors during this period. The Code also consolidates provisions of the current legislative framework to form a common forum for debtors and creditors of all classes to resolve insolvency. Who facilitates the insolvency resolution under the Code? The Code creates various institutions to facilitate resolution of insolvency. These are as follows:
What is the procedure to resolve insolvency in the Code? The Code proposes the following steps to resolve insolvency:
What are some issues in the Code that require consideration?
A version of this blog appeared in the Business Standard on May 7, 2016.