'Corporate churn must for dynamic economy'

INDIA NEEDS TO be comfortable with people and companies going bankrupt, as continuous insolvency and bankruptcy are essential for building a risk-taking and dynamic economy, said member of the Economic Advisory Council to the Prime Minister (EAC-PM) Sanjeev Sanyal.

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In an interview with ANI, Sanyal said a healthy economic system must allow for “continuous churn”, where old companies shut down, and new ones emerge to take their place. He stressed that constant change is necessary for long-term economic strength.

Using the airline sector as an example, Sanyal said the closure of Jet Airways created space for other airlines to expand. He added that companies that fail to follow rules or meet standards should be allowed to shut down. “We should allow continuous churn,” he said.

Sanyal also said that success should not be viewed negatively and that people should not resent companies that perform well.