15 Years to Build, 180 Days to Destroy: How the IBC Killed India’s Real Manufacturers While Hype Chased “Startup India”

When the Government of India launched Startup India, full-page advertisements heralded a new era of enterprise. But as someone who spent 35 years building factories, training non-technical youth, and filing 106 patents, I looked at the policy with a heavy heart.

Startup India was launched without baseline data. No government body tracked how many registered startups were actually building physical hardware versus writing software apps, trading, or importing finished goods to rebrand locally. More critically, no data was collected on long-term industrial survival rates.

Instead of building deep manufacturing capability, the policy celebrated funding rounds and valuation burns. Unseasoned “startup darlings” with zero prior manufacturing or shop-floor experience—such as venture-backed EV ventures like Ola Electric—received state support, subsidies, and media praise, even as their products faced severe safety, quality, and recall challenges on Indian roads. Building an app is a matter of months; building a 5,000-employee manufacturing ecosystem that functions under 50°C heat in a Rajasthan village is a 15-year commitment of discipline.

While the country cheered for new startup registrations, a quiet, devastating tragedy was unfolding inside the courtrooms of the NCLT. Official data from the Insolvency and Bankruptcy Board of India (IBBI) reveals that the manufacturing sector accounts for the single highest share of all corporate insolvencies (nearly 37% to 40% of all admitted cases).

Furthermore, out of all closed insolvency cases under IBC, nearly 45% end in forced liquidation, while fewer than 15–19% achieve successful resolution plans. Over 2,700 corporate debtors have been ordered into liquidation.

Institutions like Su-Kam and Educomp were not just businesses—they were the training grounds for India’s technical workforce.

Consider Su-Kam Power Systems. Over 30 years, I built Su-Kam from a ₹10,000 initial saving into a ₹1,200 crore national icon. We built 6 automated manufacturing plants, established India’s first government-approved corporate power backup R&D center, built a family of 50,000 dealers and 1,000+ distributors, exported to 70+ countries, and employed 5,000 people directly. Su-Kam was a university: we took thousands of untrained boys from small towns and turned them into world-class engineers, service heads, and business owners who lead India’s power and EV sectors today.

Or consider Educomp Solutions. Educomp pioneered the K-12 digital classroom and SmartClass revolution in India long before “edtech” became a buzzword. They installed digital infrastructure in thousands of schools, trained tens of thousands of teachers in digital pedagogy, and created an entire industry. Yet, when financial stress hit, the system showed no mercy for the pioneer.

Did the IBC law care that Su-Kam had built India’s power backup category or that Educomp had digitized India’s schools? No. The law saw only a ledger entry. The Committee of Creditors (CoC)—run by bankers with zero operational experience—shut down Su-Kam’s operations overnight. Services were closed, warranties dishonored, 5,000 families thrown into uncertainty, and a company valued at ₹300 crore was auctioned off for a mere ₹8–9 crore during the pandemic. The Su-Kam brand itself was sold at zero valuation.

The Ministry and IBBI track only one metric: “Percentage of Bank Recovery Under IBC.” Yet, official studies show that during CIRP litigation stretching from 600 to 800 days, financial creditors suffer average haircuts of 68% to 73%, while liquidation recovery yields a dismal 3% to 5% of admitted claims (a 95%+ loss of enterprise value).

While publishing bank recovery numbers, the government collects zero data on:

• How many operating manufacturing plants were shut down forever.
• How many skilled factory workers, technicians, and engineers lost their livelihoods.
• How many 30-year veteran industrialists were destroyed, barred under Section 29A, and pushed into personal insolvency under Section 95.
• How many small-town dealer and MSME supplier ecosystems were wiped out.

The most tragic aspect of the IBC is Section 29A—the clause that explicitly bars original promoters from bidding for their own companies. Designed to penalize fraudulent default, in practice it penalized the builders.

Who understands a complex manufacturing facility better than the founder who built every machine line and trained every worker? By barring experienced founders, the system forced assets into distress auctions. Valuable manufacturing infrastructure, land parcels, and production lines built by first-generation entrepreneurs were acquired for a fraction of their value by large conglomerates and vested interests. Rather than saving industry, the IBC became a legal mechanism for transferring physical assets from self-made builders to mega-corporations.

I experienced the full weight of this system. On April 5, 2018, Su-Kam was taken into CIRP. On April 23, 2018, my twin children were born in the hospital. As I held my newborn babies, I knew that the brand I had given 30 years of my life to was gone. I lost my company, my cars, my financial standing, and faced High Court, CBI, and ED notices. For months, depression surrounded me.

But an entrepreneur’s spirit is not bound to a corporate name. I stepped out of the house into the light, supported by true friends, and built Su-Vastika and Kunwwer.ai. Today, I mentor new energy storage technologies and build AI tools for the very MSMEs whom the system ignores.

If India genuinely wants to achieve “Make in India” and solve its mounting unemployment crisis, we must demand urgent policy reforms: