Business

Bankruptcy Laws to be made easier for startups: Commerce Minister

Nirmala Sitharaman told Insolvency Code will make it easier for start-ups

March 18, 2016

Insolvency Code to make it easier for start-ups: Sitharaman

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]C[/dropcap]ommerce and Industry Minister Nirmala Sitharaman said on Thursday that to begin or exit from start-up businesses, the newly proposed Insolvency and Bankruptcy Code will make it easier for new entrepreneurs.

She said at the India Today Conclave, “They should be able to get out faster, if you are not doing well, there shouldn’t be a taboo, there should not be a hitch as Insolvency and Bankruptcy Code, which is being planned, is going to make it easy to start up as much as to get out of start-ups”.

“A Start-up Action Plan that includes tax holidays has been recently announced by the government. “Thanks to the entrepreneurial skills of Indian youngsters as India is the third largest start-up country, only after the US and the UK” told Sitharaman.

An easy exit option for insolvent and sick companies which was provided and designed by the Insolvency and Bankruptcy Code Bill, has been referred to a joint committee of parliament.

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]he bankruptcy code proposes a time-bound framework – 180 days, extendable by another 90 days – to resolve insolvency cases, which, currently in the country, take an average of more than four years to resolve.

Answering questions at the conclave earlier in the day, Finance Minister Arun Jaitley said that besides the Goods and Services Tax Bill, the insolvency law was among the last major pieces of reform legislation that remain to be enacted, although he did not visualise any political roadblocks in its passage through parliament.

“Sitharaman also said the Niti Aayog will be setting up 70 incubation centres all over the country, which would be ranked in innovations, and the top 10 incubators would get a Rs.10 crore [$15.02 million] incentive award.

In this connection, she also said that with “jugaad”, or frugal innovation, which the country is known for, Indian youngsters have now brought technology and skills to where these could not reach earlier.

“As a result, today jugaad is the innovation that the government is also recognizing,” she said.