To Download Weekly Important Articles compilation(November 4th week) – Click Here
Bottom 50% in India has little access to quality education, health or transport.
World Inequality Lab
Inequality in India has accelerated in the recent decades, says Lucas Chancel, co-director, World Inequality Lab and of WID.world at the Paris School of Economics
There is another way
He also maintains that high growth and high inequality need not go hand-in-hand, highlighting the example of China which has managed higher growth than India without the same degree of inequality.
The Top 1% have the most
- We observe a very sharp and progressive rise in inequality in India since the mid-1980s. The top 1% richest individuals captured 6% of [the] total income in the early 1980s, and the value is now of 22%.
- In 2000, the top 1% captured close to 15% of [the] total income. In fact, we do not have evidence of a clear trend-break over the period.
There has been higher average income growth in India since the 2000s than before, no one denies this.
The growth rate of average Indian
- Income growth rates for the average Indian have been close to 4% per year once inflation is taken into account
- When we go beyond the average, we see that the poorest 50% of the population grew at 2.5% per year since the 2000s.
This is non-negligible, but not very impressive either, especially when we compare this figure to the average or to very top groups (above 6% per year on average).
- Such differentials mechanically lead to a much higher concentration of incomes at the top. They also suggest that much more could have been done for the bottom groups.
- Overall, the bottom 50% in India still have little access to basic goods such as quality education, health or transport.
Much More could have been done
When the top 0.1% (eight lakh adults) capture as much total income growth as the entire bottom 50% (400 million adults), clearly, this shows that much more can be done for the bottom groups in this country.
Inequality is Multidimensional
Itis also about access to health, a fair justice system, education, a safe environment, etc. are all fundamental dimensions of inequality. The report focuses essentially on income and wealth inequality
Non-economic inequality is connected to economic inequality
- In the U.S., for instance, access to quality education is really determined by parental income. In India, this statement can be extended to access to quality health services and other forms of non-economic inequality
- Indeed, reducing inequality in access to health or education is critical to reduce economic inequality.
Steps that should be taken
First, we should stress that it is up to Indian citizens to make their own choices. We are here to open debates, rather than close them
No Inheritance Tax
There is no inheritance tax in India for instance, meaning that inherited wealth, gained just by sheer luck of being born in the right family, is taxed at 0% when the poor face high taxes on certain basic consumption goods
Progressive taxation (that is, the richest should contribute more because they have the ability to do so) is essential to finance public investments in education or health for everybody.
When we look at all countries around the world, we see that high growth for bottom income groups and for the middle classes can be achieved without skyrocketing inequality
Giving TB patients money for an enhanced diet is a good step — but oversight is crucial
The Central TB Division has said the government would hand over a sum of ₹500 a month to each of India’s 35 lakh diagnosed TB patients in order to strengthen the fight against the disease.
The funds are intended to offset the loss of wages due to TB, and to help with travel and nutrition.
Malnutrition and TB
An early study from a prisoner-of-war camp in Germany in the 1940s showed that Soviet inmates, who didn’t receive extra rations from the Red Cross as their British counterparts did, were around 16 times more likely to develop the disease.
Loss of Appetite
It is a vicious cycle, because TB itself triggers malnutrition by hurting the patient’s appetite. One calculation suggests that half of all adult Indian TB patients get the disease due to malnutrition.
Lack of Data
- Sadly, despite the evidence on the TB-diet link, it is still not clear how best to fix the problem, given the lack of research into interventions that can speed up recovery
- A few small-scale studies have looked at cure rates among those patients consuming cereal-lentil powders or micronutrients such as Vitamin A and zinc, with mixed results.
But lack of data isn’t a justification for inaction.
Guidance document recommendations
In a guidance document this March, the Central TB Division proposed extensive interventions to tackle the problem
- Double the Rations
One recommendation was to double the rations under the public distribution system to families of TB patients, so that they are less likely to contract the disease
Because TB patients also need a high protein intake, the document recommends a second set of supplements, such as oilseeds and dried milk powder, which they wouldn’t have to share with the family
Rs. 500 is not enough
Given these recommendations and the scale of India’s malnutrition problem, the proposed assistance of ₹500 may not make any dent, especially if patients are not counselled on their ideal diet.
India needs to fine-tune these interventions with further evidence so that policy can be more precisely targeted. Do pre-packaged protein powders work better than rations of cereals and pulses? Do TB patients need more of certain vitamins and minerals than healthy people do? These are difficult questions to answer.
Recent Study might offer some insight
A recently announced 2000-subject study by the Indian Council of Medical Research in Jharkhand may go some way in plugging this knowledge gap, but more research is required.
A better diet is a no-brainer for an illness like this, historically called “Consumption” because of how it ate away at patients. But understanding what constitutes such a diet, and making sure that patients get it, isn’t as straightforward.
The Supreme Court on Friday upheld the right to dignity of the disabled while directing that government buildings providing public services should be made fully accessible to differently-abled persons by June 2019.
Giving a slew of directions in an 87-page judgment, A Bench of Justices A.K. Sikri and Ashok Bhushan held that the target to have at least 20 to 50 State government disabled-friendly buildings across 50 cities by December 2017 should be fulfilled.
The court rued that only seven States had met the target of having at least 50% of their government buildings accessible to the disabled. The court held that 50% of such buildings in the National Capital and State capitals should be made disabled-friendly by December 2018.
The Karnataka High Court on Friday declared the Cigarette and other Tobacco Products (Packaging and Labelling) Amendment Rules, 2014 as unconstitutional
‘2014 rules on graphics unconstitutional’
Cigarette companies have partially won a legal battle against the Union government, as the Karnataka High Court on Friday declared as unconstitutional the Cigarette and other Tobacco Products (Packaging and Labelling) Amendment Rules, 2014
The 2014 amendement
It had enhanced to 85% the area of pictorial warning on the principal area of packages of cigarette and other tobacco products.
2008 Rules to remain
The court, however, rejected the challenge made to the similar Rules of 2008, and made it clear that the 2008 rules — which had prescribed that 40% of the specified pictorial warning be printed on the principal area of the packages — would be in force until the Union government frames a fresh rule or amends the 2008 rules afresh.
- A special division bench delivered the verdict on a batch of petitions, filed by the Tobacco Institute of India, cigarette manufacturers like ITC Ltd., beedi and other tobacco products manufacturers before the High Courts of Karnataka, Calcutta, Delhi, Bombay, Gujarat, and Rajasthan, challenging the 2014 rules
- All these petitions were transferred to the Karnataka High Court by the apex court.
Differing views of the judges
Though the Bench came to a unanimous conclusion to strike down the 2014 rules, the judges differed in their views.
View of Justice Patil
- No concurrence between various govt departments
The Ministry of Health and Family Welfare unilaterally framed the Rules without concurrence of the other departments concerned, and this was a violation of the Article 77 (Conduct of Business of Government of India) and the Transaction of Business (ToB) rules framed under it as the subject of tobacco control and legislation was not attached to one department or Ministry.
- Parliamentary Committee bypassed
The rules were notified, even before the Parliamentary Committee on sub-ordinate legislations was examining them.
- View of the Ministry of Commerce: No benefit of the rules
Ministry of Commerce had opposed 85% area for pictorial warning on the ground that it would not result in any benefit and wanted to restrict the pictorial warnings to 40% or 50% .
- View of the Labour ministry: Would hurt poor families
The Labour Ministry had opposed pictorial warning for the reason that it would harm the beedi industry, on which several poor families are depending upon for their livelihood
Justice Patil did not express his opinion on Article 19(1)(g).
View of Justice Nagarathna
The 2014 rules are not contrary to the ToB and the Article 77, and noted that the rules were notified in October 2015, giving effect to from April 1, 2016, due to an order passed by the Rajasthan High Court even as the Parliamentary Committee was examining the rules.
As per recommendations of the Parliamentary Committee
Both the judges observed that the Parliamentary Committee, in its final report submitted on March 15, 2016 had recommended restricting the area of pictorial warning to 50%.
But Rules contrary to Article 19(1)(g)
The rules are contrary to Article 19(1)(g) [right to practise any profession, or to carry on any occupation, trade or business] as they are “unreasonable” restrictions imposed “without application of mind or any basis.”
No Medical data was provided
Referring to cautions and contents of warnings lime “smoking kills” or “tobacco kills”, “smoking causes cancer”, etc, judge pointed out that no medical or scientific data or empirical research was conducted and data collected placed before the court in this regard.
A three-judge Bench refused to entertain the plea, saying that the judiciary cannot question the discretion of the EC.
An “11th hour” plea by Secretary, Gujarat Pradesh Congress, to direct the Election Commission of India to count and cross-verify at least 25% of Voter Verified Paper Audit Trail (VVPAT) paper trail with the Electronic Voting Machines (EVM) votes polled in the State Assembly elections fell flat in the Supreme Court on Friday.
Justice Chandrachud observed
- How can the court substitute the discretion of the Election Commission? And why have you put the margin at 25%? Why not 5% or 10% or even 30%? We cannot encroach into the Election Commission’s authority
- The plea seemed to suggest that the Election Commission’s exercise to conduct a random match of VVPAT-EVM votes in one booth per constituency was “malafide”.
- Do you have any cogent material to show us that the EC’s decision was taken arbitrarily? We can only exercise our judicial powers after positively concluding that EC has exercise its powers arbitrarily
- We have to be slow in a case when the EC has already taken a decision. How can we discredit a process
Arguments of the petitioner
- Senior advocate Abhishek Manu Singhvi, for the petitioner, argued that the EC itself is open for random checks to verify whether the VVPAT paper trail and EVM vote count match
- Expanding the checks from just one booth in a constituency to 25% of the votes polled would only further the cause of a clean election.
- Progressively all countries have stopped the use of EVMs. Only India and South Africa use them
- Others have declared it unconstitutional… there has already been complaints about EVMs in the first phase of the Gujarat elections.
- The plea does not in any way “thwart or obstruct” the objective of a clean election, it only furthers the cause
- The demand for cross-verification of votes was scaled down to 20%, and then to at least 10%.
SC didn’t relent: safeguard already present
But the court did not relent. Justice Chandrachud said that the cause of clean elections is anyway covered when a candidate reserves the right to demand a re-count of votes polled from the Returning Officer concerned. This safeguard is provided notwithstandingthe “one-booth formula” directed by the EC
The plea was finally allowed to be withdrawn by the court, which suggested that the petitioner could, in the future file a writ petition under Article 32 of the Constitution, suggesting ways to further reform the VVPAT laws.
The Union Cabinet on Friday approved a Bill that makes instant triple talaq or talaq-e-biddat a criminal offence and a Muslim husband resorting to instant talaq can be jailed for up to three years.
This Bill will adjudicate all cases of instant triple talaq across the country except Jammu and Kashmir.
- The government intends to introduce the Bill in the winter session of Parliament that got under way on Friday
- Last month, the Law Ministry had written to all the States for their comments and asked them to revert urgently.
Muslim Women Protection of Rights on Marriage Bill
The proposed Muslim Women Protection of Rights on Marriage Bill will deal with complaints against instant triple talaq across the country, except Jammu and Kashmir.
- As per provisions of the draft Bill, earlier reported by The Hindu,a husband who resorts to instant triple talaq can be fined or face a jail term of up to three years.
- Instant triple talaq in any form — oral, written or electronic form — has been banned and made a cognisable offence
- The Bill also provides for a subsistence allowance of a harassed Muslim woman and her dependent children and the custodial rights of minor children.
- The government sources say data suggests even after the judgement, there have been 66 cases of instant divorce until November.
- And before the judgment, there were 177 cases with Uttar Pradesh and Bihar recording the maximum number of cases.
Delhi needs to play “a similar diplomatic role” to resolve the Rohingya crisis.
Bangladesh seeks UN resolution
Commending India’s role in the 1971 war with Pakistan to liberate Bangladesh, a senior Bangladesh Minister said here on Friday that Delhi needs to play “a similar diplomatic role” to resolve the Rohingya crisis.
India should pressurise Myanmar
Minister of Housing and Public Works of Bangladesh, who was in Kolkata to attend Vijay Diwas marking the surrender of the Pakistani Army in 1971, said India should influence the international community to bring Myanmar under pressure to take back the Rohingya refugees.
Reiterating a long-pending demand from human rights activists and some politicians in Sri Lanka visiting UN experts on Friday urged the government to repeal the Prevention of Terrorism Act (PTA).
UN experts say the act is an enabler of arbitrary detention
Following a 10-day visit to the island, the UN Working Group on Arbitrary Detention pointed to “significant challenges” to Sri Lankans enjoying the right to personal liberty, resulting in “arbitrary detention across the country”.
Sri Lanka Government does not agree
While the Sri Lankan government maintains that no arrests have been made under the PTA after 2015 — when the President MaithripalaSirisena and Prime Minister RanilWickremesinghe combine rose to power
The UN Working Group said it was “gravely concerned about the numerous severe restrictions to fair trial guarantees that the application of the PTA entails”.
Threats and torture
- The three-member delegation pointed out that under the PTA, a suspect cannot access legal assistance until the court proceedings commence.
- In practice, this means that any statements, including confessions, which normally form an essential part of the prosecution under the PTA, are given in the absence of lawyers
- The Working Group also underscored instances where persons convicted under the PTA had allegedly been subjected to harassment, intimidation, threats and torture to extract confessions.
Used against Tamils
- Successive governments have used the PTA against Tamils in the north and east during the war and after, at times arresting large groups of people by surrounding villages
- In the south, the government used it in the late 1980s, during the second armed insurrection led by the leftist JVP, in an apparent attempt to curb dissent.
In 2016, the Sirisena-Wickremesinghe administration began drafting a new legislation to counter terrorism that would replace the PTA. However, several lawyers and human rights practitioners have voiced concern about the draft carrying forward problematic elements from the PTA, particularly those which sanction torture.
India needs to worry about terror groups attacking critical infrastructure such as power plants, telecom and banking systems.
Like every other country, securing critical infrastructure is most important: power plants, power grids, water supplies and transportation.
- Kaspersky work regularly with the Indian government and signed an MoU with the CERT (Computer Emergency Response Team) last year
- Kaspersky exchanges information about the latest threats, and was able to share information about the last WannaCry attack in real time.
Innovation and Literacy should go hand-in-hand
- It is not possible to stop innovation, and not possible to stop countries like India from growing and improving lives through Internet, smart cities and other projects. But if these are done in non-secure ways, they will become targets.
- Cybersecurity must be incorporated in projects here right at the beginning, not at the end, or you will have a weak foundation that is vulnerable to cyberattacks.
- Every 40 seconds, a computer connected to the Internet is hacked
- Today, we see 300,000 new malicious applications or file every day, and malware, that can sabotage your systems have already cost the world 430 billion dollars.
The National Green Tribunal (NGT) on Friday imposed a ban on plastic items, including plastic bags and cutlery, in Haridwar and Rishikesh.
Green panel imposes ₹5,000 fine on violators
- Further, the bench headed by NGT chairperson Swatanter Kumar banned the sale, manufacture and storage of all such plastic items, till Uttarkashi.
- The green panel specified that the ban would be applicable to towns in Uttarakhand, along river Ganga and its tributaries.
- The Tribunal said a fine of ₹5,000 would be imposed on those violating the order. Action would be taken against erring officials as well.
- In a judgment passed in 2015, the NGT had observed: “Plastic waste and other municipal waste is being thrown directly into river Ganga and its banks are full of such waste. There is no proper system for collection, segregation and disposal of municipal solid waste in the entire city of Haridwar.
- As part of the project to clean the river, the bench had held, “Under no circumstances, plastic carry bags of any thickness whatsoever would be permitted. The procurement, storing and sale of such plastic bags, plates, glass, spoons are hereby prohibited.”
Throwing of Municipal waste banned
Further, the Tribunal had also prohibited the authorities from throwing municipal waste, construction and demolition waste into Ganga and its tributaries.
The green panel passed the directions while hearing a plea filed by environmentalist M.C. Mehta, and observed that despite previous orders passed by the Tribunal, plastic was still being used, which in turn was polluting the river.
Reserve Bank of India (RBI) Governor Urjit Patel said with growth picking up in the second quarter of the current financial year, the economic slowdown may have bottomed out.
‘Financial markets have shown resilience, stability amid heightened volatility’
Official data released this month, showed gross domestic product (GDP) in the July-September quarter expanded 6.3% year-on-year, snapping a four-quarter slowdown. Growth in the preceding quarter was 5.7%.
While structural changes, such as the introduction of the Goods and Services Tax (GST), may result in temporary disruptions, they were “efficiency augmenting” in the medium to long term.
He said the current account deficit “remains within sustainable levels”, and other indicators of external viability also reflected a healthy improvement.
International investors warming up
The RBI chief said international investors had warmed to the Indian economy as reflected in the sizeable foreign investment inflows.
Foreign Exchange Reserves
At the same time, building up adequate buffers in foreign exchange reserves was a natural “self-insurance” to manage risks arising out of volatile capital flows.
Monetary policy committee
The monetary policy committee has left interest rates unchanged for two successive bimonthly policy reviews, citing concerns about the outlook for inflation. The RBI has also retained a ‘neutral’ policy stance
EU said it would give the green light for Brexit talks to move to the crucial phase 2.
Two days after parliamentarians inflicted a major legislative defeat on the British government, Prime Minister Theresa May won a domestic political reprieve, as the EU said it would give the green light for Brexit talks to move to the crucial phase 2
Transitional Arrangements to be covered
Welcoming the “sufficient” progress that had been made on addressing the issues in the first phase of negotiations, the European Council said that the talks would now cover transitional arrangements as well as the longer term relationship but warned that progress was contingent on the commitments made in the first phase to be “respected in full and translated faithfully into legal terms as quickly as possible”.
The Council also insisted, in its guidelines for the next phase of negotiations also published on Friday, that during any transitional period (Britain has proposed a period of around two years) EU rules, regulations, budget, trade policy and laws would continue to apply to Britain.
Tough road ahead
These conditions are unlikely to go down well among so-called Hard Brexiteers who are keen for free movement, and the application the European Court of Justice’s rulings to stop applying to Britain from the earliest date possible (March 29, 2019).
Whatever the challenges, the developments mark a milestone in the British government’s progress towards the Brexit deadline, which the government is currently attempting to enshrine in legislation
The First Phase
The first phase involved difficult negotiations on three major issues:
- What the rights of EU citizens in Britain would be and vice versa
- How much Britain would have to pay to “divorce” the EU
- And how exiting the single market and the customs union could be reconciled with keeping an open border between Ireland (an EU nation) and Northern Ireland (part of the United Kingdom and therefore set to leave the EU)
A further parliamentary battle is expected next week when the government attempts to push through an amendment that would enshrine the deadline of March 29, 2019 in legislation — something that a number of Conservative MPs have also indicated they will oppose.
The Centre said it would reimburse the merchant discount rate (MDR) applicable on digital transactions up to ₹2,000 for the next two years to give a fillip to digital payments in the country.
To cover transactions of up to ₹2,000
- This will be applicable on transactions done using debit cards, UPI BHIM application or Aadhaar.
- The decision, cleared by the Cabinet, was expected to cost the exchequer more than ₹2,500 crore.
MDR is payable by the merchant to the bank when a payment is made at a merchant point of sale
As per government’s estimates, the total MDR to be reimbursed to the banks in respect of transactions worth less than ₹2,000 in value would be ₹1,050 crore in FY 2018-19 and ₹1,462 crore in FY 2019-20.
Digital transaction below ₹2,000 account for about 15-20% of the payments in terms of value. In volume terms, it was much higher.
- A Committee comprising Secretary, Department of Financial Services, Secretary Ministry of Electronics & IT and the CEO, National Payment Corporation of India (NPCI) will look into the industry’s cost structure of such transactions to determine reimbursement level.
- The committee will also see that the scheme is not misused
The Centre has increased customs duty on several electronic items including televisions, mobile phones and microwaves, making the import of these goods more expensive and thus lending a fillip (something which acts as a stimulus or boost to an activity) to its ‘Make in India’ programme.
- The custom duty on push button phones, including mobiles, and on smart electricity meters has been increased to 15%, from 10% now, as per a notification issued by the Ministry of Finance
- The duty on products like monitors, projectors, water heaters, microwaves, TVs and lamps and light fittings has been doubled to 20%.
Major Policy Shift
- The duty increases had been made under “emergency powers” included in the customs laws, and could prompt manufacturers in other industry segments to push for similar protection from imports.
- To foster the national initiative of Make in India
- Increasing revenue as well as to encourage more manufacturing and value addition in India
- This would make import of these goods costlier and industry would be forced to explore domestic manufacture of these goods to reduce cost instead of importing these goods.
Apple to be hit
Meanwhile, Reuters reported that the rise in tax to 15% on handsets will make imports of phones — including most of Apple’s iPhone models — more expensive at a time the company’s revenue growth is slowing in India’s $10 billion smartphone market.
Boost to Domestic Cellphonemanufacturing industry
PankajMohindroo, president of the Indian Cellular Association, said the increase will boost domestic manufacturers who are making about 500 million cellphones a year, more than double the output three years ago
Mobile phones in India
- Eight out of 10 phones sold in 2017 have been made locally, data from Counterpoint Research showed
- Samsung assembles in India most of the handsets it sells in the country.
- Apple currently only assembles its iPhone SE models in India and imports others
- The company has sought a range of incentives and tax relief from the government for it to expand its manufacturing in India, but government officials have said they are unlikely to make exemptions for Apple.
India’s goods imports in the seven months ending October rose 22 % to $256.4 billion from a year earlier, raising concerns among policymakers.
The government’s move will shift attention away from recovery of bad loans to selling assets of defaulting corporates
The 2017 Forbes India List says that the combined net worth of India’s 100 wealthiest stood at a whopping $479 billion, top corporate borrower groups in India are unable to repay loans and make timely interest payments.
The government has taken the high moral ground to deal with the menace of non-performing assets or NPAs that have brought many public sector banks on the verge of bankruptcy.
Amendment of IBC 2016
It sounded the bugle for errant promoters with its ordinance of November 23 amending the Insolvency and Bankruptcy Code (IBC) 2016.
Lead to further loss
Many are of the view that if the errant promoter is disqualified from the bidding process it will lead to further losses for banks.
Merely signals intent
However, the ordinance is not likely to either eliminate errant promoters or hugely escalate bank losses apart from the deep haircuts already suffered. It merely signals the government’s intent to shift attention away from recovery of bad loans to selling the assets of defaulting corporates.
No explicit direction from the government
The May 2017 ordinance directed banks to accept deep haircuts on their non-performing loans. However, there was no explicit direction from the government as the majority owner of public sector banks to recall the outstanding loans and recover as much as possible against the personal guarantees of promoters.
Corporate Defaulters being praised
- Paeans (a song of praise or triumph) are being sung in praise of corporate defaulters for their stellar role in the development of the infrastructure sector
- The Mumbai and Delhi airports are being cited as examples of the success of the public-private partnership (PPP) model
- The fact that defaulting corporates such as GMR Infrastructure, GVK Power and Infrastructure, and Jaiprakash Associates borrowed more money than they could repay is being overlooked and their inability to repay is sought to be justified by “circumstances beyond their control”.
No change in the Creditworthiness of these Corporates
These corporates have not been downgraded on their creditworthiness parameter although the Reserve Bank of India (RBI) has been monitoring all large loans through the Central Repository of Information on Large Credits (CRILC) since 2014.
Would the government show the same leniency to the 32,000 odd home buyers of JaypeeInfratech and waive off their home loans since they may not get possession of their flats due to “circumstances beyond their control” ?
The fact that lending banks in case of large borrowers were operating as a consortium of a score or more of banks obviates the need for any investigation into the corporates-bank nexus that caused this loss of lakh-crores of depositors’ money
The all-powerful Resolution Professional
The recent ordinance makes the resolution professional all powerful
It is now up to the resolution professional to decide who will be eligible to bid for the defaulter companies or their assets.
- The ordinance conveys the urgency of impeccable antecedents of bidders so as to exclude wilful defaulters as well as companies whose interest and charges are outstanding for a period of one year or more
- An existing promoter is eligible to bid for majority control only if all dues are paid
- A defaulting promoter is not even allowed to bid indirectly through or along with other parties since “connected persons” are excluded from eligibility
- A strict interpretation of the ordinance would mean that the loan accounts of each one of the 400-odd defaulter corporate borrowers are technically classified as NPAs. Otherwise they would not have reached this stage of resolution.
These accounts are likely to have been through various rounds of unsuccessful restructuring in the past
- Having failed to repay even the reduced amounts of loan and interest to the banks, their past credit history should raise serious questions on their antecedents
- Hence, the promoters of these companies should not qualify as eligible bidders
- So far, none of the first 12 corporates referred to the IBC has been debarred from bidding back their companies after driving them aground.
- Thus, the ordinance creates the scope for disqualifying an existing promoter or including a rank outsider into the bidding process.
- The Insolvency and Bankruptcy Board of India (IBBI) is the regulator set up on October 1, 2016 under the Insolvency and Bankruptcy Code
- The resolution professionals entrusted with the responsibility of sorting out the insolvent companies or individuals can be registered with any one of the three insolvency professional agencies.
- The IBBI is assisted by the disciplinary, advisory and technical committees
Top Corporates as heads of various IBBI Committees
- A quick glance at the IBBI website reveals that the advisory committees on corporate insolvency and liquidation are chaired by several top corporates.
- While there is nothing unusual about government consultation with corporate India, the appointment of corporates as heads of important corporate insolvency advisory committees under IBBI does not inspire confidence in the credibility of the resolution process
The recent ordinance may end up being used selectively to defeat the very objective of penalising the errant promoter. The banks will only lose if resolution is sidetracked by the ensuing power struggle among corporate India to purchase distressed assets at rock-bottom prices.