An effective regulatory environment is one of the most important factors for proper implementation of a business.   The ease of doing business around the world is determined not only by the convenience of entering but also by the departure method offered by the country's legislative structure. The IBC is the second most important change in India's legal system. It is because IBC not only makes India significantly more prominent in the legal environment, but it also offers a new economic identification and recognition on a worldwide scale. The Insolvency and Bankruptcy Code, 2016, in India's bankruptcy law that tries to integrate the existing framework by producing a single statute for insolvency and bankruptcy. The research examines the code's distinguishing traits as well as its legal foundation. The study is exploratory in nature. In accordance with this, the report also discusses the influence of India's Insolvency and Bankruptcy Code on the macroenvironment.

Any country's legal environment is always important for its economic development. If that country's legal framework is well-constructed and implemented, the country's global standing will undoubtedly be strong. India is one of the countries that has long struggled with an inefficient insolvency resolution structure. The previous insolvency resolution regimes had a critical drawback in that they were governed by several Acts, such as the Presidency Towns Insolvency Act, 1909, Sick Industrial Companies Act, 1985, Limited Liability Partnership Act, 2008, Companies Act, 2013, and so on, which ultimately results in  excessive delays in resolving insolvency cases. IBC is the second most important reform in India's legislative framework, following the implementation of the Goods and Services Tax. It is because the IBC not just makes India significantly more powerful in the legal environment, but it also offers a new economic identification and analysis on a worldwide scale. This code has a favourable impact on both the economic and non-economic fronts. Since the code was passed, India's worldwide economic image has significantly improved, as seen by increased FDI, increased M&A deals, and an improvement in India's ease of doing business ranking, among other things. The Insolvency and Bankruptcy Code, 2016, is regarded as one of India's most significant economic reforms, and it is expected to play a key role in minimising credit risks. The Bankruptcy and Bankruptcy Code (IBC) of India consolidates and changes the law governing the insolvency resolution process. The Code's implementation appears to have far-reaching consequences for lenders, financial institutions, corporations, and professionals, allowing them to operate as resolution professionals. Bankruptcy legislation attempts to provide a rescue option for distressed firms, to facilitate the faster winding up of insolvent entities, and to provide investors with an easier exit route.

1. What are the regulatory structure of the Insolvency and Bankruptcy Code ?
2. How has IBC affected the microenvironment ?

The study was undertaken to assist the underlying broad goals:

1. To investigate the distinguishing features and regulatory framework of the 2016 Insolvency and Bankruptcy Code.
2. Determine the impact of the Insolvency and Bankruptcy Code on India's macroenvironment.

Liu (2004) has explained majority of studies on business failures is primarily focused on crosssectional research and does not take into account the real behaviour of the elements influencing the company's survival over time. One of the most criticised elements in this strategy is the disregard for the macroeconomic environment in which corporations operate, which definitely has a big impact in determining a company's financial performance. 

Altman (1971, 1983) was the first to identify the impact of the macroeconomic conditions on firm insolvency estimates. He investigated the relationship between the business decline rate in the United States and several macroeconomic parameters. One of the most prominent reasons of bankruptcy, according to his research, was the 'credit squeeze,' especially during times of restrictive monetary and credit policies. He discovered that the likelihood of corporate failure increases during periods of low economic development (as measured by gross national product (GNP), restrictive money supply, and low investor aspirations.

Ayushi Mishra and Srijan Anant (2019) according to the researcher, IBC is one of the major reforms carried about in India's legal system. According to the author, the code results in the consolidation of several bankruptcy laws into a single statute. The author has examined the code's essential elements as well as its legal foundation.

Platt and Platt (1944) used the cross-sectional correlated autoregressive distributed lag model on four subgroups to study the impact of macroeconomic variables on corporate failure. As explanatory variables, they used the real interest rate, real employee wages, revenues, workforce change, and the rate of corporate entrepreneurship. Their findings supported the theoretical predictions that the corporate failure rate is inversely associated to economic activity indicators and positively linked to costs. 

The new law's objective is to motivate entrepreneurship, credit availability, and to balance the interests of various parties by integrating and modifying laws relating to the timely reorganisation and establishment of insolvency of corporate persons, partnership companies, and individuals, as well as to optimise the value of such persons' properties and relevant issues. It aims to harmonise the legislation governing corporate and limited insolvency. Companies with limited liability (including joint liability corporations and other limited liability entities), indefinite liability partnerships, and individuals who are legally protected by a variety of restrictions. Towards a unified legislative framework. A reorganisation of this type would result in improved regulatory clarity and the extension to many creditors of clear and cohesive provisions influenced by company loss or unwilling to pay it down².

➢ DISTINGUISH FEATURES OF THE CODE

These are the following key features of the code:  

1. Insolvency Code: An insolvency code is a comprehensive legislation that envisions and governs the process of insolvency and bankruptcy for all persons, including corporations, partnerships, LLPs, and individuals.
2. No complexity of law: The code has moved away from the many laws governing the debt collection, insolvency, and liquidation processes to present an unified platform for all debt recovery and insolvency remedies.
3. Short time resolution: The code provides a short time resolution and specifies set time frames for company and individual insolvency resolution. The process is required to be completed in 180 days, with a maximum extension of 90 days. Furthermore, there is a possibility for fast track resolution of corporate insolvency within 90 days for a faster process. If the insolvency cannot be addressed, the borrowers' assets may be sold to reimburse the creditors.
4. One window processing: It has been formulated to provide the applicant with one window clearance, whereby he receives the adequate remedy from the same authority, as opposed to the previous position of law, wherein if the company is unable to revive, the method for winding up and liquidation must be conducted under special law governed by independent authorities.
5. Mechanism clarity: The code establishes a clear process for dealing with insolvency and bankruptcy. The code's framework is quite detailed, and the entire insolvency resolution process must be completed within 180 days.
6. One channel of authority: According to the code, there is only one chain of authority. This doesn't even allow civil courts to intervene in an application existing before the adjudicating tribunal, lowering the number of lawsuits. The National Company Law Tribunal (NCLT) will hear insolvency cases for corporations, while the Debt Recovery Tribunal (DRT) will hear insolvency cases for individuals.
7. Priority for workers' and employees' interests: The code also safeguards workers' and employees' interests. It eliminates from the debtor's assets during liquidation workmen's provident fund, pension system, and gratuity fund dues.
8. Establishment of a new regulatory authority: It provides for the establishment of a new regulatory authority known as the “insolvency and bankruptcy board of India” to start regulating professionals, agencies, and information utilities involved in the resolution of corporate, partnership, and independent insolvencies. The board has been already formed and is in operation.
9. Encourage entrepreneurial activity: Because of its revival mechanism and quick resolution procedure, the code encourages entrepreneurial activity in India.

The Corporate Liquidation Procedure, which begins with the appointment of a liquidator. The technique begins with the completion of an order concerning the realisation of assets and the distribution of proceeds among creditors and other parties. No action can be taken against the Corporate Debtor under IBC Section 14. A protection creditor may earn money from the sale of properties based on priority by executing the protected assets in accordance with applicable regulations. Creditor claims would be judged inferior to unsecured creditors to the extent of the deficiency.

The Insolvency and Bankruptcy Code was largely enacted to minimise the losses sustained by the Indian banking system as a result of NPAs. Though it is highly unlikely that it will bring back the money that is currently trapped in stressed assets in terms of NPAs, it will, to a considerable extent, help to avoid the entire crisis. Apart from its legal significance, the IBC has also played an important role in macroeconomic policies, giving India a significant presence on the global stage. The following are some of the broader effects of India's Insolvency and Bankruptcy Code (IBC) of 2016:

The following are the Economic effect: 

1. Non-performing assets (NPAs) management - The Indian Banking Structure is now struggling with the chronic problem of mounting NPAs, and its management has been one of the banks' primary emphasis areas since then. In such a circumstance, the implementation of the Insolvency and Bankruptcy Code may prove to be a significant milestone in easing NPA burden on the Indian banking system. IBC has managed to address stressed assets worth Rs 3 lakh crore both directly and indirectly, and has handled of almost half (4,400) of the 9,000-odd cases it has acquired in the last two years, including those passed from the Board for Commercial and Financial Reconstruction (BIFR).
2. Expansion in FDI - In 2012-13, India's FDI was 34298 US$ million, but following the implementation of the code, it increased to 61463 US$ million in 2017-18, an increase of about 80%. There are numerous reasons for this expansion, but one of them is the IBC, which gives a very clear-cut process with reference to insolvency and bankruptcy, as well as priority to employees, workers, and creditors. It also provides a robust legal framework for India.
3. Growth in Mergers and Acquisitions (M&A) Agreements- Mergers and Acquisitions (M&A) activity in the country has expanded tremendously, with deals worth $14.3 billion done in the last two years. The Insolvency and Bankruptcy Code (IBC) has boosted activity in troubled merger and acquisitions (M&As) in India, with transactions involving Indian companies totalling $104.5 billion in 2019.
4. Enhanced ‘Ease of Doing Business' Ranking - Following the establishment and enforcement of the Goods and Services Tax, which is regarded as one of the country's most significant economic changes, the Insolvency and Bankruptcy Code would be next in line. These have had a significant impact on India's “World Bank's Ease of Doing Business (EODB),” which has risen 23 places in the last two years to rank 77th out of 190 global countries.
5. Evolution of India's Credit Market - The code constituted an Information Utilities Commission (IUs). It is a centralised repository of borrowers' economic and financial information; it would confirm creditor relevant data and claims against borrowers as required. 
6. Crony Capitalism Elimination - Crony Capitalism is an economy in which firms survive on the return of money gained through an association between business houses and the political elite rather than through risk-taking. With stronger restrictions in place with the implementation of the IBC, it has become exceedingly difficult for promoters, shady or otherwise, to reclaim control of their enterprises when their firm goes bankrupt, as well as to excessively their financial sheet.

The following are the Non-Economic effect: 

7. Ease of Exit and Shortened Duration of Liquidation - With the emergence of the Insolvency and Bankruptcy Code, it has now become extremely easy for companies to make an incredibly simple exit or liquidate (180+90 days resolve-or-liquidate measure) their business, which was not previously the case in the Indian Corporate Structure (on an average of 3-4 years). This would be advantageous in encouraging international investors to set up shop in India. It would also contribute to an increase in Indian innovation.
8. Cross-Border Insolvency - Cross-Border Problems deals with Indian firms that have claims against defaulting worldwide firms, or vice versa. Due to the complexity of the situation, the IBC has attempted to incorporate some of the greatest efforts for CrossBorder Insolvency in the world, but these are insufficient to adequately deal with defaulted instances.
9. Right of Functional Creditors - Previously, no law prohibited operational creditors from filing suit, but the code provides that operational creditors (domestic and international) have the right to file suit against by the default. As a result, the code gives foreign creditors rights, which will improve India's and others' economic dealings.
10. Relationship with Trading agreements - If a country's regulatory environment is robust, well-structured, and appropriate for other countries, its relationship with trade agreements such as SAARC, ASEAN, EU, NAFTA, and others will be profitable. Because IBC is the law that meets all of the above requirements, we may conclude that it will improve India's relations with the trade agreements.

According to the findings of this study, the IBC Code 2016 has developed a framework for time-bound resolution of outstanding debts with the goal of improving the convenience of doing business in India. According to the secondary data used for this academic research regarding the Insolvency and Bankruptcy Board of India (IBBI), approximately 40 corporate debtors cases have already been taken under the IBC terms and creditors have received over 50,000 crores, implying that the average realisation has been greater than 50% to date. This demonstrates the value of having this code. It was reported in January 2018 that at least 2,434 new cases had been brought even before the National Company Law Tribunal (NCLT) until 30 November 2017, and at least 2,304 lawsuits demanding the winding-up of firms had been transferred from various high courts. This, once again, slows down the total resolving process. Cross-border insolvency and non-recognition of Indian laws in foreign jurisdictions, as well as vice versa, have posed certain difficulties.

For such transactions, the procedure is ambiguous. Few commentators have contended that the IBC has too much government involvement because of its position in professional appointment, firing, and inspection. It has been noticed that there is still a shortage of infrastructure to deal with large and huge insolvency cases. Aside from the aforementioned problems, the IBC Code has contributed to India's global ranking in terms of ease of doing business. For the first time, India is ranked among the top 100 countries in the world. This increase is due to economic reforms such as IBC and GST. As a result of this progress, we can anticipate an increase in FDI and GDP in the country. It has also given a significant boost to India's M&A drive. The achievement of the ‘Make in India' campaign will be achievable only if an atmosphere in India is developed in which the mistakes of entrepreneurs and financiers are addressed and managed prudently and on time. The proper operation of a credit market in an economy ensures that all stakeholders are actively contributing to the success of a country's entrepreneurial growth. The IBC Code is a first step in this approach. The article goes into the numerous viewpoints of the IBC law and discusses its major issues as well as its influence on the Indian economy, both domestically and globally. The IBC has clearly been landmark legislation, and it is still maturing, so it may face a number of unexpected difficulties.

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