India mulls rules for quicker resolution of builders’ insolvency

Indian realty sector has seen many builders going bust over the years, leaving home buyers in a fix due to the uncertainty of completion and delivery of houses that their life savings were tied up in. Under the current norms, admission into insolvency procedure halts the completion of all projects of the developer in default.

As of June this year, 436 out of the pending 1,999 cases of corporate insolvency were in the real estate sector, junior minister for corporate affairs Inderjit Singh Rao had informed the lawmakers in August. The IBC had little success in the timely resolution of such cases, making the need for a special framework to address the nuances of the real estate sector more pronounced.

To speed up the resolutions, the government also plans to introduce a centralized platform for registration of cases, simplify pre-packaged resolution plans, and provide flexible plans for handling operational and nonviable assets separately, they said.