Policy Update
Anushree Khare
BACKGROUND
As the institutional economics framework of Daron Acemoglu and James A. Robinson posits, a country fails to grow as long as it is burdened with extractive institutions that support stagnation rather than entrepreneurship. For years, India’s corporate insolvency environment has been representative of the same kind of stasis. Thus, instead of being able to exit a state of distress through expeditious bankruptcy procedures, many borrowers became trapped within an overly complex web of regulatory delays while the enterprise lost value at every turn due to the fragmentation of various recovery courts.
Before 2016, there were multiple legislative frameworks that created system-wide…