Insolvency framework in the country has delivered sharper recoveries, better credit discipline, and cleaner bank balance sheets over the past nine years, but mounting judicial delays and capacity constraints in insolvency courts now threaten to erode these gains, the Economic Survey 2025-26 has warned.
Opening its assessment with a blunt diagnosis of institutional stress, the survey pointed to severe pendency in the National Company Law Tribunal (NCLT), the backbone of the Insolvency and Bankruptcy Code (IBC). As of March 2025, nearly 30,600 cases were pending before the NCLT, with an estimated clearance time of almost 10 years at current disposal rates.
This backlog, the survey noted, has pushed insolvency cases far beyond their…