What is the Full form of BIFR?
The full form of BIFR is the Board for Industrial and Financial Reconstruction. It was an agency of the Government of India and a division of the Department of Financial Services of the Ministry of Finance, created under the Sick Industrial Companies Act (SICA), 1985. Its purpose was to reshape and recover sick undertakings and to shut down or liquidate the ability of sick performances to grow or occur in the future or the long term.
Objectives of BIFR
- The BIFR consisted of a chairperson and two to fourteen other representatives.
- Elected High Court judges or having a professional experience of at least 15 years was the prerequisite to be a member.
- The Board would oversee only large or medium-sized sick industrial enterprises where a large sum of money was lost.
History of BIFR
- Industrial sickness began in India in the pre-independence days. The Indian government tried to combat it in the initial days with certain ad-hock procedures involving the nationalisation of banks to provide provisional assistance.
- The Tiwari Committee was created in 1981 and proposed broad-based legislation to deal with industrial sickness. As a consequence, SICA came into existence in 1985, and BIFR was formed under SICA in January 1987.
- The AAIFR (Appellate Authority for Industrial & Financial Reconstruction) was founded in April 1987.
- In 1991, under the authority of SICA, government companies were adopted. Afterwards, both public and private organisations with occupational sickness cases were included.
- The Amendment Bill was introduced in 2001 when the government felt that the BIFR did not achieve its objectives of precautionary industrial sickness firms.
- In 2003, the Repeal Act on Sick Industrial Companies was passed, which took the place of SICA and asked to replace BIFR & AAIFR with NCLT (National Company Law Tribunal) and NCLAT (National Company Law Appellate Tribunal), respectively.