Problem
Corporate Insolvency Takes Far Longer Than the Law Allows, and Creditors Recover a Fraction
- National
When a company cannot pay, resolving it takes far longer than the law allows and creditors get back a fraction of what they are owed. The average corporate insolvency resolution took 744 days as at 31 March 2026, up from 713 a year earlier, and 78 per cent of ongoing cases had passed the 270-day mark. Recovery depends entirely on which measure is used, and this entry records that rather than choosing one: the Insolvency and Bankruptcy Board's cumulative record is about a third of admitted claims, the Economic Survey reports recovery rising from 28.3 per cent in 2023-24 to 36.6 per cent in 2024-25, and ICRA reports roughly 31 per cent in successful resolution plans against about 4 per cent in liquidations. ICRA also reports a separate overall-recovery measure of 23 per cent for 2025-26 against 46 per cent for 2024-25; it differs from the measures above because they use different bases and definitions, and none of them is interchangeable with another. Large cases dominate whichever measure is used: claims above ₹1,000 crore accounted for 95 per cent of the value recovered in 2025-26 from 8 per cent of approved plans, which implies smaller creditors fare worse than any average suggests.
This is the most specific entry on this branch of the catalogue. The evidence behind it is below.
Who is responsible
- Insolvency and Bankruptcy Board of India (IBBI) · Regulatory bodyRegulates the insolvency process and publishes resolution and recovery data.
- Ministry of Corporate Affairs · Ministry or DepartmentAdministers the Insolvency and Bankruptcy Code and the National Company Law Tribunal's capacity.
Evidence and sources
- ICRA press release on corporate insolvency resolution (27 May 2026) · Research paper or study · published 27 May 2026ICRA reports an average corporate insolvency resolution time of 744 days as at 31 March 2026, up from 713 a year earlier; 78 per cent of ongoing cases past 270 days; liquidation recovery of about 4 per cent, down from 5 per cent, with liquidation timelines at 531 days against 508; recovery in successful resolution plans of about 31 per cent; claims above ₹1,000 crore accounting for 95 per cent of the value recovered from 8 per cent of approved plans; and only 18 pre-packaged insolvency applications admitted as at 31 March 2026.
- Insolvency and Bankruptcy Board of India, quarterly newsletter (September 2025) · Government documentThe Board records cumulative recovery across resolved corporate insolvency processes of about 32-33 per cent of admitted claims — ₹3.99 trillion realised against ₹12.31 trillion claimed — with average time to resolution of 603 days for resolved cases and 518 days for liquidated cases. ICRA separately reports single-year recovery falling to 23 per cent in 2025-26 from 46 per cent in 2024-25 on a different aggregation; this entry records both rather than choosing one, and the difference in definition would need resolving against ICRA's full methodology before any single recovery percentage could be treated as the figure.
- Economic Survey 2025-26, Chapter 3, paragraph 3.22 — recovery through the Insolvency and Bankruptcy Code · Government documentParagraph 3.22 of the Survey reports recovery through the Insolvency and Bankruptcy Code improving from 28.3 per cent in 2023-24 to 36.6 per cent in 2024-25, and recovery through SARFAESI improving from 25.4 per cent to 31.5 per cent. This is a third official series, on a different basis again from the Board's cumulative figure and from ICRA's measures.
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