Strengthening India's IBC: Judicial reforms as the key to economic growth

India's Insolvency and Bankruptcy Code (IBC) has been a remarkable reform, bringing much-needed structure to resolving distressed assets. It has successfully transformed how businesses, creditors, and investors approach insolvency, marking a significant step forward in India's economic evolution.

- Sunil Kanoria

However, its achievements could have been even more pronounced if they were complemented by targeted judicial reforms.

The judiciary plays a pivotal role in the success of the IBC. Yet, delays caused by case backlogs, a lack of specialized knowledge, and limited judicial capacity have often slowed its implementation. As Prime Minister Narendra Modi envisions Viksit Bharat—a developed India by 2047— strengthening our judicial framework is no longer an option but a necessity. The time has come to address these gaps and ensure that the judiciary becomes a true enabler of economic growth.

Building a Judiciary for a Modern Economy

One of the biggest hurdles facing the judiciary is its sheer workload. With over 47 million cases pending across various courts, delays have become the norm rather than the exception. These delays not only undermine the IBC’s effectiveness but also discourage investment and hinder business recovery.

To tackle this, a key reform could be to extend the retirement age of judges. Currently, Supreme Court and High Court judges retire at 65. Raising this to 75, with an assessment of health and capability at 70, would allow the judiciary to retain its most experienced minds for longer. This simple step could go a long way in addressing the capacity crunch.

The Case for Specialized Insolvency Courts