Terming Insolvency and Bankruptcy Code (IBC) as a ‘seminal reform’, Chief Economic Adviser (CEA) KV Subramanian has said that it has been instrumental in changing the mindset of promoters of businesses by making them more accountable. Before IBC, he said, there used to be this feudalism where the corporate debtor took it as the divine right to be in control.
Subramanian has stated that one big change that the IBC has brought is that it has ended feudalism of the promoters in a capitalistic society. He noted that there is absolutely no space for feudalism in an economic society which is actually based on freedom. In a democracy or a free society, he said there is no space for feudalism. Talking about resistance to reforms in a democracy, he said it comes from a vocal minority who have access to corridors of power.
CEA said ‘in any democracy, when you think about reform, there is always this tussle between two sets of stakeholders, one that is a vocal minority versus a silent majority. The vocal minority is typically one that has benefited from the status quo. On the other side of this tussle is a silent majority. The reason that this majority often stays silent is that they oftentimes don't even know the benefits that they are going to have that are going to come to them from the reform’. Observing that the silent majority realises when benefit accrues to them, he said, the same vocal minority versus silent majority being played out in recent reforms.
