New Delhi, (IANS) The National Democratic Alliance (NDA) government seems to be getting ready to showcase the Insolvency and Bankruptcy Code passed by parliament during the just-concluded session as one of its key reform steps and a game-changer.
Parliamentary Affairs Minister M. Venkaiah Naidu on Thursday, expressing happiness over the passage of the bankruptcy code bill in both houses of parliament, called the new legislation as a “game-changer”. He also made use of the occasion to describe Prime Minister Narendra Modi as a “true reformer”.
“Extremely happy as bankruptcy bill is passed by both the Houses. History has been created. It will build fine and faster resolution mechanism,” Naidu tweeted.
The new code, as passed by both houses, is seen as a positive reform strategy for the financial sector and especially for state-run banks burdened with stressed assets.
The new laws will give creditors a “legal path” for recovering their dues in a time-bound way, finance ministry officials say.
“It’s one of the big economic reforms and a game changer.This will take the country towards higher growth. Thanks to all who supported the bill,” Naidu said in another tweet.
After repeated stalling of parliamentary proceedings and hurdles mostly created in the Rajya Sabha in last two years, the ruling Bharatiya Janata Party (BJP) feels it can now showcase the bankruptcy code as a “critical” achievement that could go a long way in checking black money.
“Shell companies can no longer take advantage of the Double Taxation Avoidance Agreements (DTAA). Modi the real reformer,” Naidu said in another tweet.
The minister also hoped that “ending of the Mauritius route is the way forward to chase down black money and get transparency in financial sector”.
The Rajya Sabha on Wednesday passed the Insolvency and Bankruptcy Code 2016, a key reform legislation that will make it much easier to do business in India and help the recovery of bad loans for banks.
The bill, passed by the Lok Sabha last week, seeks to overhaul the laws regulating insolvency amid a surge in bad loans.
Experts feel that a three-decade-old favourable Double Tax Avoidance Agreement (DTAA) with Mauritius, which while it encouraged inflow of Foreign Direct Investment (FDI), also raised suspicion about “round-tripping”, or a way of funds transfer employed by firms to evade tax.
A protocol amending the DTAA was signed between India and Mauritius on Tuesday in the island nation’s capital.
The new agreement actually addressed to plug a major loophole, which has long been identified as a factor that encouraged pumping in of black money through stock markets.