Tuesday, 13 August 2019
Manufacturing, real estate and construction firms account for nearly two-thirds of all companies facing bankruptcy proceedings since the new Insolvency & Bankruptcy Code (IBC) came into effect in 2016, official data showed.
Data shared by the Insolvency and Bankruptcy Board of India (IBBI), which administers the bankruptcy code and regulates professionals, showed that manufacturers alone accounted for 42 percent all companies in distress. Companies in the services segment, including hotels, restaurants, transportation and communication businesses, too, face acute financial distress, accounting for 15 percent of the 2,162 cases before the bankruptcy tribunals.
Asia’s third largest economy grew 6.8 percent in FY19, with GDP expanding by just 5.8 percent in the quarter-ended March, the slowest in five years. Consequently, India lost the tag of being the fastest growing major economy in the world to China, which recorded gross domestic product (GDP) growth of 6.4 percent in the March quarter.