Exciting news from the Ministry of Corporate Affairs (MCA) as they aim to boost recovery from corporate insolvency processes under the Insolvency and Bankruptcy Code. MCA Secretary Manoj Govil shared this update at a recent event in New Delhi, emphasizing the government’s commitment to enhancing the ease of doing business.
Govil highlighted the importance of efficiency in setting up, operating, and winding up businesses. This move aligns with the government’s efforts to streamline processes and improve overall business practices.
Recovery rates in corporate insolvency processes play a crucial role in the financial health of creditors. Recent data from August 2023 showed a recovery rate of 30.8% from 542 insolvency procedures completed under the IBC. This indicates room for improvement and optimisation in the system.
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In addition to insolvency processes, MCA is working on developing new accounting standards for Limited Liability Partnerships (LLPs). Govil also highlighted the significant reduction in the insolvency resolution period, bringing it down to an average of three months compared to the previous two-year timeframe.
Economic Growth
Govil shared these updates at the 75th anniversary event of the Institute of Chartered Accountants of India (ICAI), where Union Minister Nitin Gadkari was also present.
Gadkari commended the growth of the auto sector in India, noting the sector’s substantial increase from ₹7.5 trillion to ₹15 trillion in the past ten years. He credited the chartered accountants in attendance for their contribution to this remarkable growth.
ICAI focused on embracing digital transformation and incorporating new technologies to modernize the profession. The introduction of generative artificial intelligence (AI) features for practicing chartered accountants signals a forward-looking approach in line with the government’s vision for India’s development by 2047.
Govil projected India’s economy to reach 30 trillion dollars by 2047, emphasizing the nation’s growth potential. With India currently standing as a 4 trillion dollar economy, the expected eight-fold increase in nominal GDP showcases a promising future ahead.
