Bankruptcy, insolvency related work out from law ministry domain

NEW DELHI: The work relating to bankruptcy and insolvency has been taken out from the domain of Law Ministry and put under Department of Economic Affairs, a step aimed at ensuring smooth processing of a key legislation being pushed by the government.

The Legislative Department was carrying out work related to "bankruptcy and insolvency". Now "legislation relating to bankruptcy and insolvency" will be under the Department of Economic Affairs, according to an order issued by Cabinet Secretariat.

Necessary changes in Government of India (Allocation of Business) Rules, 1961, which governs working of the central government departments, have been carried out.

Seeking to improve ease of doing business, the Centre had last month introduced in Parliament the 'Insolvency and Bankruptcy Code, 2015' that provides for resolution of insolvency in a time bound manner.

The Code, which seeks to provide an easy exit option for insolvent and sick companies, has been referred to a 30-member joint committee of the Members of Parliament for further scrutiny.

It also seeks to create a unified framework for resolving insolvency and bankruptcy in India. Insolvency is a situation where an individual or organisation is unable to meet its financial obligations.

The joint committee will submit its report by the last day of the first week of the Budget session, Finance Minister Arun Jaitley had said while moving a motion in Lok Sabha.

The committee will have 10 members from Rajya Sabha and 20 from Lok Sabha.