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Parliament Passes Bill To Help Small And Medium Sector

Parliament Passes Bill To Help Small And Medium Sector

Parliament passes bill which will help boost the small and medium enterprises sector

Parliament on Thursday passed the Factoring Regulation (Amendment) Bill, 2021, which will help the micro, small and medium enterprises (MSME) sector by ensuring enhanced working capital assistance and cash flow for it.

The bill, that was passed in the Rajya Sabha on Thursday, had been cleared by the Lok Sabha on July 26.

The legislation, helmed by Finance Minister Nirmala Sitharaman, was passed after only a 15 minutes discussion amid vociferous protests by opposition MPs over Pegasus, inflation and farmers issues.

"It is a very important Bill which will benefit the MSMEs of this country because a difficulty is constantly expressed by the MSME that their receivables are getting delayed. As a result, there is a provision of selling their receivables to a third party. If the third party is going to make an immediate availability of funds, they shall be able to move their business smoothly. There are several such advantages in factoring from payment of the seller," Ms Sitharaman said.

Several suggestions from the U K Sinha committee have been incorporated in the bill, post which it was brought in September 2020 and then referred to the standing committee of the House.