Rescuing firms, not shutting them prematurely, should be the goal of IBC: CAG

Economy


(This story originally appeared in on Oct 02, 2020)

NEW DELHI: Comptroller and Auditor General
G C Murmu has a word of advice for the government as it prepares for a new insolvency landscape for the post-Covid phase. The federal auditor said the Centre should be mindful of preserving the lives of companies and livelihood of people in distress.

“As the government prepares the insolvency landscape of the country for the post COVID-19 phase in the longer term, one is hopeful that the measures taken in the short and medium term will be successful in preserving the life of companies and livelihood of persons in distress,” he said, stressing on the fact that rescuing firms should be the prime objective of the Insolvency and Bankruptcy Code (IBC), not shutting them prematurely.

Murmu was addressing a gathering of officials of the IBC Board of India here on Thursday on the progress made on the law and its adaptability in the wake of Covid-19 pandemic.

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The federal auditor said that once the pandemic is behind us, a few issues that would need to be handled through the IBC would be making provisions for resolving group insolvencies and cross border insolvencies. “Implementing various provisions relating to individual insolvency and bankruptcy under the Code is also an agenda to examine based on the emerging economic situation,” he said.



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