Over five years ago I reviewed the the recommendations of the Indian Assessment Committee with regard to revising India's antiquated corporate insolvency laws. You can read my thoughts here.
What we in America would call corporate bankruptcy or reorganization under chapter 11 does not exist in India. What India's law currently provides for corporations experiencing severe financial distress is a lackadaisical administrative regime called the Sick Industrial Companies Act. SICA, in my opinion, does little more than permit insolvent enterprises to remain in a zombie-like stasis by prohibiting creditors, particularly banks, from pulling the plug. Thus, banks are burdened with bad loans, themselves become undercapitalized, and in turn need to be bailed out by the Reserve Bank of India. Go here and here to read my previous comments on this subject.
Two years after my first comments on the subject of Indian insolvency law, I posted here about an Indian corporate insolvency case that was recognized by the United States District Court under chapter 15 of the U.S. Bankruptcy Code. Since then, crickets.
At long last, however, progress may be made, (H/T Jason Kilbourn at Credit Slips here for bringing this to my attention.) You can go here to read a post about the final report of the "T.K. Vishwanathan Committee." The report argues for a complete overhaul of all Indian insolvency law, corporate and personal. (T.K. Vishwanathan is a senior civil servant and serves a Secretary General of India's lower house of parliament.) Or you can go here to read another account. The second article contains a link to the legislation itself if you would like to read it.
All of this points in the right direction. It remains to be seen, however, whether India's fractious parliament can attend to business.
All of the above deals with business bankruptcy. For individuals, the current Indian insolvency regime is a patchwork of laws left over from British colonial days. It provides very little in terms of individual debt relief. Virtually anything would be better than what now exists although deep-rooted cultural forces can render legal changes of only modest significance.
In any event, many things can (fail to) happen in India's Parliament for reasons that are opaque, even to well-informed Indians so I would not hold my breath waiting for final legislative approval of the work of the T.K. Vishwanathan Committee.