Economics • Indian EconomyHard
Analyze the structural objectives of the 'Insolvency and Bankruptcy Code (IBC), 2016'. What primary systemic problem was this legislation enacted to resolve?
A. The proliferation of non-performing assets in the banking sector by establishing a time-bound resolution process for corporate distress
B. The evasion of corporate income taxes through shell companies registered in international tax havens✓ Correct Answer
C. The accumulation of unmanageable external commercial debt by state-owned electricity distribution companies
D. The lack of adequate pension coverage for informal sector workers retiring without formal social security
💡 Solution & Explanation
The Insolvency and Bankruptcy Code, 2016, consolidated existing laws to create a single time-bound framework for resolving insolvency of corporate persons, partnership firms, and individuals, addressing the chronic problem of stressed bank assets. It empowers creditors to initiate corporate insolvency resolution processes through the National Company Law Tribunal. The National Company Law Appellate Tribunal hears appeals arising from tribunal orders under this code.
More Economics Indian Economy questions
- In the context of India's national accounts, which economic activity falls strictly under the 'Secondary…
- What does the term 'Fiscal Deficit' signify in the context of the Union Budget of India?
- Examine the recommendations of the NK Singh Committee appointed in 2016. What major fiscal architecture did…
- What is the core objective of the 'Atmanirbhar Bharat Abhiyan' economic stimulus package?
- Which of the following taxes is levied by the Union Government but collected and appropriated by the State…