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Economy

The Insolvency Code is stuffed with severe flaws and will not achieve its purpose

Updated : April 05, 2018 12:38 PM IST

The IBC will lead to suspension of lending activity, stalled projects, erosion of value of Indian enterprises, faster growth of unemployment and increased costs of lending, among other problems.
Its one-size-fits all prescription could be abused as a contract enforcement mechanism, or a debt recovery mechanism, which require fundamentally different approaches.
There is no provision preventing otherwise healthy companies that are not defaulting on loans to lenders being taken through the IBC.
The Insolvency Code is stuffed with severe flaws and will not achieve its purpose
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