New Delhi: Reacting to the death of Cafe Coffee Day founder V G Siddhartha, Finance Minister Nirmala Sitharaman on Thursday said business failures in the country should not be tabooed, or looked down upon.
Responding to a debate on the Insolvency and Bankruptcy Code (IBC) in the Lok Sabha, Sitharaman said that businessmen should get honourable exit or resolution to the problem in letter and spirit of the IBC. "In this country business failure should not be tabooed. It should not be looked down upon. It should not be treated as a curse," Sitharaman said. On the contrary, through proper legitimate resolutions, "we should give an honourable exit" from business if that is what the entrepreneur wants, or a resolution to the problem so that the entity can be a going concern with newer equity participants coming into the picture, she added.
Sitharaman further said "the letter and spirit" of IBC and the frequent amendments which are coming in response to the developing situation outside are "all in keeping with this spirit". "So, our wish, the government's desire is to be able to provide simpler and a fairly considered solution within the statutory framework that we have given ourselves," she added. Siddhartha's body was found on the banks of the Netravathi river in Karnataka on Wednesday.
In a letter purportedly written by him, Siddhartha alleged, among other reasons, harassment by the Income Tax Department as cause for his extreme step. The IT department has denied the charges. Jayadev Galla (TDP) said businesses may fail because of economic downturn or business cycle. Galla also said that accountability of banks needs to come under scrutiny.
"Signing of personal guarantee (by industrialist to take loan) is leading to taking extreme action like suicide," he asserted. Kalyan Banerjee (TMC) said that those who have taken loans from banks, will have to pay. Pinaki Misra (BJD) referred to the death of the coffee tycoon, saying it is unfortunate that the insolvency law "should continuously continue to grow and expand in our country." He said it does not bode well for the country because "that is not how you reach the USD 5 trillion mark."