Now it takes about 11 to 15 years to liquidate a bankrupt business, which will come down dramatically with automation.
The project will cost the government Rs 359 crore and the ministry intends to tender out the project in next 3-4 months. It also expects to implement it in about 60 weeks from then.
Company law
But for all that to happen, India will need to change its company law. Now all liquidation goes through high courts, but the MCA wants an independent board, National Company Law Tribunal, to liquidate companies.
"Right now we are talking to the cabinet for approval. The amendment bill is ready. Then it will be taken to the Parliament. It may not be tabled in May even though we are hoping it does," said Komal Anand, Secretary, Ministry of Company Affairs.
According to the World Bank report, one of the biggest problems identified in India for the international business community is incorporation of a company and more so, the liquidation.
The government's initiative to expedite liquidation could earn India some brownie points on corporate governance and attract more foreign investors.
However, to see through the amendment in the company law in quick time, will remain a tough challenge for the government.
Quelle: NDTV Profit, 24.04.2006
