THE ECONOMIC Survey 2021-22, which was tabled in Parliament on Monday, has integrated the theme of ‘process reforms’ — defining it as “simplification and smoothening of the method for actions the place the federal government’s presence as a facilitator or regulator is critical’’. The Survey has outlined the necessity for reforms, together with simplification of voluntary liquidation course of for corporates for ease of exit and for institutionalising a regular Cross Border Insolvency Process, together with the necessity for reforms within the patent software regime.
Voluntary liquidation
Liquidation could be involuntary as within the case of insolvency or chapter; or voluntary, which may very well be on account of private causes and subsidiaries being merged. An organization might determine to voluntarily shut its operation even when it’s viable. “There is a case for simplifying the problem in the Voluntary Liquidation process, to improve ease of exit for business. Apart from simplifying the issues in the various steps in the processes, there is a need for the creation of a single window for the entire process. A portal that combines all the steps of the liquidation process altogether, starting from application by companies to processing by all departments will prove to be very useful,” it stated. As of September 2021, 1042 circumstances have been filed below voluntary liquidation, out of which, last experiences have been acquired for 483 circumstances, and the ultimate order of dissolution has been handed in 257 circumstances. Of the continuing circumstances, practically 32 per cent of the circumstances are pending over 2 years and 19 per cent for 1-2 years.
Cross-border insolvency
Cross border insolvency entails circumstances through which an bancrupt debtor has belongings and/or collectors in a couple of nation. The Survey stated the present provisions below IBC are ad-hoc in nature and are vulnerable to delay. Entering into mutual (reciprocal) agreements requires particular person long-drawn-out negotiations with every nation. This results in uncertainty of outcomes of claims for collectors, debtors and different stakeholders, the Survey talked about. Therefore, there’s a want for a standardised framework for cross-border insolvency, it stated. Insolvency and Bankruptcy Code, 2016 (IBC) supplies for the home legal guidelines for the dealing with of an bancrupt enterprise. At current, IBC has no commonplace instrument to restructure the corporations involving cross border jurisdictions. Citing the report of the Insolvency Law Committee (October 2018), it stated the the United Nations Commission on International Trade Law (UNCITRAL) may very well be adopted with sure modifications to go well with the Indian context.
Delays for granting patents
Highlighting India’s low expenditure on Research and Development (R&D) actions as one of many key causes for comparatively low patents in India vis a vis the US, China, the Survey stated the procedural delays and complexity of the method additionally lead to low patents in India. “The average pendency for final decision in acquiring patents in India is 42 months as of 2020. This is much higher than 20.8, 20, 15.8 and 15 months respectively for the USA, China, Korea and Japan,” it stated. The common pendency for last determination in buying patents has decreased in India from 64 months in 2017 to 52 months in 2019 and additional to 42 months in 2020.
Most of India’s startups are within the IT/ knowledge-based sector. The time taken for step one for a patent, i.e. publishing the applying by the controller, is presently 18 months in India, in comparison with 15.4, 14.4, 11.1, 10.2 months, respectively, within the US, China, Korea and Japan. To cut back the time taken within the software course of, prescribed limits for step one could also be decreased to 14-15 months.