When will India celebrate failure?

The executive and legislature work in unison to enact laws to address pressing socio-economic issues. Historically, laws would include a clause stating that they would come into effect on a date appointed by the executive. However, recent enactments include a proviso to that clause, allowing different provisions of the same law to come into force on different dates.

- M S SAHOO & ASHISH MAKHIJA

While this flexibility helps the executive align the implementation with the readiness of the required machinery, it also provides a convenient excuse to delay the implementation indefinitely. This happens even when there is no political or public opposition to its implementation, highlighting a disconnect between the legislative intent and executive action, which undermines the intended purpose.

The Insolvency and Bankruptcy Code, 2016, (Code) is a notable example. This was enacted to provide a comprehensive framework for the stress resolution of corporate entities, proprietorships, partnerships, and individuals. India has an estimated 1.7 million companies, 170 million proprietorships and partnerships (100 million agricultural and 70 million non-agricultural), and 1,400 million individuals. However, the IBC is currently available only for corporate entities, covering a mere 0.1 per cent of potential beneficiaries. Nearly a decade after its enactment, proprietorships, partnerships, and individuals, representing 99.99 per cent of those who could benefit, still lack access to the Code. The executive has restricted the availability of the Code to a tiny fraction of those who need it, thereby denying a key benefit: The promotion of entrepreneurship.