The government intends to move a reworked bill to amend Insolvency & Bankruptcy Code (IBC) during the second part of the budget session. The reworking will be based on recommendations given by a Parliamentary penal.

“I expect, subject to conditions, to table the Insolvency and Bankruptcy Code (Amendment) Bill in the second half of Budget session starting March 9 incorporating suggestion of the committee,” Finance Minister Nirmala Sitharaman, who also holds the Corporate Affairs Ministry portfolio, said in an media interaction. The proposed amendments to insolvency law would help further enhancement in the timelines and effectiveness of proceedings as well as alignment of India‘s insolvency regime more closely with the global best practices.

This is going to be the seventh amendment to IBC Act implemented in 2016. So far, it has undergone six legislative interventions since its enactment and the last amendment was in 2021. On August 12, 2025, the government introduced a Bill in the Lok Sabha to amend the Insolvency and Bankruptcy Code (IBC), proposing a raft of changes, including provisions to reduce the time taken for admission of insolvency resolution applications.

The Bill, referred to a select committee of the Lok Sabha, has also submitted its report in December 2025. The committee recommended further rationalisation of creditor-initiated insolvency, group insolvency and cross-border insolvency frameworks, while also proposing statutory timelines for case disposal by insolvency tribunals.

On creditor-initiated insolvency, the committee flagged stakeholder concerns over the enforceability and binding nature of conduct standards for the committee of creditors (CoC). It said prescribing both standards of conduct and decision-making timelines would enhance governance, improve predictability and reinforce the Code’s time-bound resolution objective. Accordingly, it recommended modifying clause (sa) under Section 196(1) to read: “specify the standards of conduct for the Committee of Creditors and its members, including the period within which the Committee of Creditors shall take decisions.”

A significant recommendation relates to liquidation proceedings. The committee suggested moving away from the automatic appointment of the resolution professional (RP) as liquidator. It proposed revising Section 34 of the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 to provide that an RP who has conducted the corporate insolvency resolution process or pre-packaged insolvency resolution process for a corporate debtor shall be ineligible for appointment as liquidator.

Separately, the committee proposed a clear statutory timeline for appeals, recommending insertion of a new clause mandating that the National Company Law Appellate Tribunal dispose of appeals within three months from the date of receipt.

Focus

Meanwhile, Sitharaman said the Union Budget for FY27 has focussed on investment as a priority tool for boosting consumption, and the trajectory of fiscal deficit shows that the government’s priority is growth. Also the volatility in gold prices is due to global uncertainty, and many central banks are investing in gold.

“It also shows that investors do not have confidence in any one particular currency. and hence the rush to buy gold,” Sitharaman said.

She also said the fiscal deficit target has to depend on each year’s economic situation and in the past the government has pegged fiscal deficit a couple of basis points lower than the previous fiscal year. This fiscal with the “government’s priority being growth, I am comfortable with 4.3 per cent deficit target. We will see how it goes,” Sitharaman said.

Published on February 2, 2026