India to have new bankruptcy code soon: Modi

Bengaluru: India would soon have a new bankruptcy code to hasten pace of liquidation in stress cases, Prime Minister Narendra Modi said on Tuesday.

“We are working on a new bankruptcy code and a company law tribunal will be set up to improve ease of doing business in India with a transparent and predictable tax regime,” Modi said at tech summit here where visiting German Chancellor Angela Merkel was present with a large delegation.

Though the code was incorporated in the amended Companies Act in 2013, it could not be implemented as some issues remained unresolved.

The proposed laws will govern businesses formation, contract enforcement, debt repayment and bankruptcy as they pay a critical role in economic growth.

Areas of concerns for doing business in the country are the lengthy litigation process, difficult arbitration procedures and deficient bankruptcy laws.

Referring to regulatory and taxation issues that were adversely impacting sentiment of foreign investors, the prime minister told German investors and firms that his government had taken decisive steps to remove bottlenecks.

“We have expedited regulatory clearances, including security and environmental clearance; increased validity period of industrial licences; de-licenced many defence items, lifted curbs on end-use certificates and increased validity of defence industrial licences to 18 years from three years,” Modi said.

Similarly, the government had clarified that it would not resort to retrospective taxation and reinforced it by not levying minimum alternative tax (MAT) on foreign portfolio investors and deferred implementing the General Anti-Avoidance Rules (GAAR) by two more years.

“We have introduced the Goods and Services Tax Bill in parliament and are hopeful to roll it out from April in 2016,” Modi reiterated.

Noting that the economic partnership between the two countries remained below full potential, he said his government was keen to develop the sectors where Germany was strong.

“We are committed to creating favourable conditions for business and industry because we believe they are necessary for improving lives f our ordinary citizens,” Modi said in his address in English to about 500 Indian and German honchos.

Stressing that the government had no business to be in business, he said the country was committed to protect Intellectual Property Rights (IPRs) of all innovators and entrepreneurs.

“We have taken initiatives for transparency and online processing in IP administration. A progressive and forward looking national IPR policy is being finalized,” Modi added.