September 19, 2020
Dinesh Trivedi speaks on The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020
FULL TRANSCRIPT
Sir, thank you very much.
Honourable Member ne hamara kaam bahut he aasan kar diya hai, so I will just go through bullet points.
Sir, pehle toh we are going through an extraordinary situation in the country and I truly feel ki aaj ke ke tareekh mein na toh koi satta paksh hona chahiye na toh vipaksh hona chahiye. Desh ke liye kuch acha hai toh hum saath mein milke. Aap ne kaha toh aap ke irade ne, aap taali baja sakte ho, bilkul yehi spirit hai. Aap ke irade nek hai aur niyat saaf hai. Humein koi shanka nahin hai. Aur Nirmala ji is my friend. She is very competent, she doesn’t need a certificate. Hum jo bolne ja rahein hai yeh hamara farz hai, ki aakhir mein insaan hain, galtiyan ho sakti hain. I may be wrong but I will give you my observations, as I see them.
The intention of the Bill is nek, no doubt about it; you really wanted to help. But like everything else, you are in a hurry to do things without a larger consultation.
Sir, the Bill is—please don’t take it otherwise—a hastily drafted ill-worded piece of legislation which the Honourable Member just now talked about in detail. Thus it would unfortunately defeat its own purpose, like the treatment would become worse than the disease itself.
While the intent and object of the Bill is to provide protection to the debtor during this unforeseen, serious downturn in the economic situation. But it will only result in rapid value erosion of the capital employed—own capital as well as borrowed. It will deepen the trouble, double the trouble. It could even hasten the end completely; I hope it doesn’t happen, this is just my observation.
There will be complete destruction of value, going against the interests of both the debtor and the creditor. Besides delaying the process by up to one year, it takes away the debtor’s option of hastening the restructuring process, even if he or she wants. Like, when you don’t need oxygen because you are a healthy person, but zabardasti oxygen ki tube aap ki naak mein ghusaye jaaye toh jo healthy person hai woh zyada oxygen ke liye mar sakta hai.
It will be a big blow to the ARCs, the asset restructuring companies, which will delay the encouragement of investment, or the infusion of capital, and will instead discourage it further. Sir, the default cause has already been spoken about, I don’t need to get into that. Many times what will happen is that there will be unscrupulous people who will take advantage of this. So I think you should have given the option—that whoever wants to do it, please do it. People with personal guarantee will be at a disadvantage.
Like I said, and which is very fortunate for India, we have a record level of food stock. Oil prices are at a historical low. We have enough of foreign exchange. So what is the need of the hour? The need of the hour is perhaps to print notes, and I know what I am talking about. The need of the hour is to put, maybe, Rs 10,000 or 15,000 or 20,000—I’m not sure of the exact amount—in the accounts of the needy people. If not everyone, at least the really needy people. Us se kya hoga, Sir—aur aap achhi tarah se samajhte hai, aap gyani hai—ki demand will be created. When demand will be created, there will be more jobs, and conversely, if there are more jobs, there will be more demand. This will give the government more taxes. Demand hoga toh tax hoga. Aur jab government to tax zyada milega, hamara jo GST due hai, States ko jo nahi mil raha—and it’s a legitamate due, Sir—woh tax ka due aap humko de sakenge kyun ki sarakar ko tax aayega.
Aanth me main yehi kahunga, ki aap ka package jo diya, acha kiya. Yadi aap ko lagta hai ki to reconsider, my humble request is, don’t stand on any prestige, please do reconsider and I thank you very much for your time, Sir.
