Hindu Editorial Analysis : Twin Balance Sheet | Insolvency and Bankruptcy Code
The analysis of The Hindu editorial topic Cautious Optimism
1. The Economic Survey projects the GDP growth could accelerate to 7 - 7.5% in 2018-19, from 6.75% in the current fiscal 2017-18.
2. Chief Economic Adviser is Arvind Subramanian
3. Goods and Services Tax (GST) was imposed on 1st July, 2017.
4. The annual agricultural income will be reduced by 20-25% for unirrigated areas because of climate change.
To overcome this, the government will focus on an efficient irrigation technologies and modern agricultural technologies.
5. Twin Balance Sheet Problem:
- "Twin Balance Sheet" deals with two balance sheets of both Banks and Companies.
- "Twin Balance Sheet Problem" is the stress on balance sheets of both Banks and Companies. It has been as a major obstacle to investment.
- Insolvency and Bankruptcy Code was enacted in 2016. It aimed to repeal the Presidency Towns Insolvency Act, 1909 and Sick Industrial Companies (Special Provisions) Repeal Act, 2003. The Lok Sabha has passed the Insolvency and Bankruptcy Code (Amendment) Bill in 2017.
- Under IBC, debtor and creditor both can start "recovery" proceedings against each other. Insolvency and Bankruptcy Board of India (IBBI) has been appointed as a regulator and it can oversee these proceedings.
- Companies have to comlete the entire insolvency exercise with in 180 days under IBC. If the creditors agree the dead line may be extended.
- For smaller companies (an annual turnover of Rs.1 crore) the insolvency exercise must be completed in 90 days and the dead line can be extended by 45 days.
- The Insolvency and Bankruptcy Board of India has 10 members, including representatives from The Ministries of Finance and Law and Reserve Bank of India.
- The present chairperson of IBBI is M.S.Sahoo.