Economics • Indian EconomyMedium
What is the principal purpose of the 'Insolvency and Bankruptcy Code (IBC), 2016' in India?
A. To nationalize failing corporate entities and absorb their liabilities into the public sector.
B. To consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner.✓ Correct Answer
C. To provide unemployment doles to workers retrenched due to industrial restructuring.
D. To penalize promoters for defaulting on personal bank loans without judicial recourse.
💡 Solution & Explanation
The Insolvency and Bankruptcy Code of 2016 provides a single-window, time-bound framework for resolving insolvency and bankruptcy for corporate persons, partnership firms, and individuals. It replaced a fragmented legacy framework to improve ease of doing business and credit availability.
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