Government to Introduce IBC Amendment Bill in March Budget Session
Finance Minister Nirmala Sitharaman has announced that the government plans to introduce the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 during the second half of the Budget session, which commences on March 9. This legislative move follows the submission of a report by the parliamentary committee that has been examining the proposed amendments to the insolvency framework.
Focus on Improving Timelines and Global Alignment
The proposed changes are specifically designed to further enhance the timelines and effectiveness of insolvency proceedings in India. Additionally, the amendments aim to align the country's insolvency framework more closely with global best practices, ensuring that India remains competitive and efficient in handling corporate distress.
Speaking during a media interaction held a day after presenting the Budget 2026-27 in the Lok Sabha, Sitharaman stated, "I expect, subject to conditions, to table the Insolvency and Bankruptcy Code (Amendment) Bill in the second half of the Budget session starting March 9, incorporating the suggestions of the committee."
Seventh Legislative Change Since 2016
This amendment will mark the seventh legislative change to the Insolvency and Bankruptcy Code since its implementation in 2016. The IBC has already undergone six previous legislative interventions, with the most recent amendment carried out in 2021. Over the years, the insolvency framework has significantly transformed the debtor-creditor relationship in India, instilling greater discipline among companies and promoters by strengthening the consequences of default on debt repayments.
Background and Committee Review
The finance minister, who also holds the Corporate Affairs portfolio, emphasized that the proposed legislation is based on recommendations submitted by the parliamentary committee tasked with reviewing amendments to the IBC. Earlier, on August 12, 2025, the government had introduced a Bill in the Lok Sabha proposing multiple changes to the IBC, including measures aimed at reducing the time taken for the admission of insolvency resolution applications.
This Bill was subsequently referred to a select committee of the Lok Sabha, which submitted its comprehensive report in December 2025. The upcoming amendment is expected to incorporate key insights from this committee report, paving the way for a more streamlined and effective insolvency resolution process in India.
