The government may consider broad-basing the composition of the Committee of Creditors (CoC) – a panel of corporate debtors – which oversees the effective resolution plan of companies under the Insolvency and Bankruptcy Code (IBC).

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Sources told CNBC-TV18 that there have been discussions between various departments of the government to allow Operational Creditors limited representation on CoC set up under IBC. Currently, only financial creditors comprise the CoC and operational creditors don’t get any representation – but only under some special circumstances. Creditors may also be reorganised through amendments in the IBC for the purpose of voting on resolution plans.

These discussions happened as a part of a combined initiative of various departments under the coordination of DPIIT to improve India’s ranking in Ease of Doing Business Index, which will be released by the World Bank in the later part of 2020. Currently, India is ranked 63rd in the index and in the Resolving Insolvency parameter, India has been placed at 52nd position.

New strategy

As a part of the strategy to further boost India’s ranking, six parameters of the EoDB have been chosen. These are enforcing contracts, resolving insolvency, starting a business, registering property, paying taxes and trading across borders. The government has also started to monitor implementation of the EoDB related parameters in Bengaluru and Kolkata – the two cities which will be assessed by the World Bank along with Delhi and Mumbai this year for finalising India’s ranking.

As of now, India is ranked 139th in the “Starting a biz” parameter and to boost this, the government wants to ensure that ESIC, GST, EPFO and professional tax registrations are done at the same time through a common process while registering a new company.

To improve rankings in the “Registering Property” parameter, the four cities have been prodded to ensure online land titling registrations, cadastral mapping of all plots, and timely disposal of property disputes. India is ranked 154 in this parameter.

Special attention has been given to ensure faster disposal of court cases, fast-tracking of important cases and use of electronic case management tools by courts. That is because India fares very poorly in the “Enforcing Contracts” parameter with a rank of 163.

In addition, the government is also looking at carrying out reforms pertaining to a new EoDB parameter – Government Contracting – which will be part of the index.

First Published:Jan 1, 2020 8:08 PM IST