'Want quick passage of bankruptcy law'

Finance Minister Arun Jaitley on Monday urged the Opposition to help pass bankruptcy and insolvency laws in Parliament, in absence of which, the government was unable to get a firm handle on the long pending issue of non-performing assets (NPAs), and wilful defaulters.

“The country needs bankruptcy and insolvency laws. That will give power to the authorities to take over management when a company is sinking,” Jaitley said in his reply to the discussion on the Budget for 2016-17 in the Lok Sabha. The House later passed the Budget by voice vote.

Observing that in the last three years, most visible of defaulters have escaped the country, Jaitley said the entire system, including the legal arrangement, have been misused by wilful defaulters to prevent banks from recovering their dues.

The government, he said was now taking steps to clean up the banks’ balance sheets, and make it more transparent.

“They cannot work on a concealed balance sheet,” he said, adding, “Not a single rupee has been written off by the banks.” He was replying to members’ concerns that banks have written off large loans, and hence, the NPA problem.

Jaitley said, most of the sectoral NPAs were due to the steel sector which were constrained by cheap import from China. “Now, the government has imposed minimum import duty on steel, and the sector is recovering,” he said, hoping in the next two to three quarters, the steel sector will be able to stand on its own feet.

The Insolvency and Bankruptcy Code 2015 is aimed at timely resolution of insolvency and bankruptcy. The Bill proposes resolution of corporate insolvency within a period 180 days. Currently, there is no single law dealing with insolvency and bankruptcy in India, while liquidation of companies is handled by the high courts, individual cases are dealt with under the Presidency Towns Insolvency Act, 1909, and Provincial Insolvency Act, 1920.

On the widespread criticism of imposition of 1% excise duty on jewellery, the finance minister said, it was in preparation for rollout of the Goods and Services Tax (GST), which may soon be a reality.