Union Budget 2024-2025: Focus on Insolvency and Ease of Business

Finance Minister Nirmala Sitharaman presented the Union Budget 2024-2025, emphasizing ease of doing business and enhancing the Insolvency and Bankruptcy Code (IBC). The proposed Integrated Technology Platform aims to bolster consistency and transparency, while additional tribunals are expected to expedite resolutions.

Union Minister for Finance and Corporate Affairs Nirmala Sitharaman unveiled the Union Budget for 2024-2025, spotlighting the Modi Government's priorities in its third term. The budget emphasizes 'ease of doing business' and fortifies the Insolvency and Bankruptcy ecosystem. To enhance outcomes under the Insolvency and Bankruptcy Code (IBC), Sitharaman proposed the creation of an Integrated Technology Platform aimed at ensuring consistency, transparency, timely processing, and better oversight.

According to Sitharaman, the IBC has successfully resolved over 1,000 companies, leading to a direct recovery of more than Rs 3.3 lakh crore for creditors, and 28,000 cases involving over Rs 10 lakh crore have been disposed of prior to admission. The Finance Minister also proposed reforms to further strengthen the IBC, including enhancements to the tribunal and appellate tribunals, which are expected to expedite insolvency resolutions.

Sitharaman also announced the establishment of additional tribunals, some of which will exclusively handle cases under the Companies Act. Commenting on this, Samir Sheth, Partner & Head of Deal Advisory Services at BDO India, said that judicial delays have hindered the success of the IBC. Setting up new tribunals to handle IBC cases, along with the proposed Integrated Technology Platform, will expedite the resolution process and bring efficiencies.

Ramesh K. Vaidyanathan, Managing Partner at BTG Advaya, lauded the proposed amendments to the IBC and the decision to add more tribunals under the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT). He believes these steps will improve the recovery of stressed assets and increase the speed and accountability of the process. However, he emphasized the importance of filling tribunal vacancies promptly and appointing competent members.