Infrastructure and bankruptcy code

Abstract

Between 2000 and 2008, the Indian economy was experiencing tremendous growth. The businesses were flourishing spurred by the easy availability of credit. Majority of this credit came from the Public Sector Banks. The major sectors including power, iron & steel and cement were the beneficiaries of this disbursement cycle which went about aggressively in increasing their capacity. However, with the downturn in the business cycle in 2008 volatility in the market increased leading to unviability of certain business at the current prices. As businesses became unsustainable, the ability of the companies to repay their loans dwindled and this led to the spurt of non-performing Assets.