The Economic Survey 2024-25 lavished praise on the Insolvency and Bankruptcy Code (IBC) for transforming the behaviour of distressed companies, highlighting that the law has acted as a deterrent, encouraging many firms to resolve their financial distress early in order to avoid the consequences of a resolution process.
The survey notes, “Thousands of debtors are resolving distress in the early stages… they are resolving when default is imminent, on receipt of a notice for repayment, but before filing an application, after filing application but before its admission, and even after admission of the application.”
By March 2024, 28,818 applications for initiation of corporate insolvency resolution processes (CIRPs) of corporate debtors…
