Crony capitalism in India will come to an end with the new bankruptcy code though it is facing some teething troubles, Niti Aayog CEO Amitabh Kant said here on Thursday.
“Insolvency and Bankruptcy Code (IBC) will ensure that the world of crony capitalism comes to an end. Earlier, you could borrow and not repay. Now if you don’t pay, you lose your business,” Kant said highlighting the major structural reforms introduced by the Narendra Modi government.
later speaking to reporters on the sidelines of an ICC event, Kant acknowledged that there were some teething problems as Insolvency and bankruptcy Code was a new law and hoped it would give good results.
There had been questions on IBC as it had failed to achieve timebound completion of the resolution process on major NPA accounts released by the Reserve Bank of India. IBC had mandated 270 days time-bound resolution or send to liquidation but due to various litigations, there had been delays.
“One after another the businesses are losing their business empires. The NClT is bidding them out,” he said.
National Company law Tribunal is the adjudicating body of the IBC.
Kant said banks were going bust due to NPA and government had to bring in some discipline as it was public money.
He said one of the key constraints of having high GDP growth was the old outdated institutions in the country which need to be ‘radically restructured’.
“You cant get into 9-10 per cent economic growth till you dont restructure many of the institutions ... For instance UGC, AICTE, Medical Council of India need to be radically restructured”, he said.