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Factoring Amendment, National Institute of Food Technology Bills passed in Lok Sabha amid din

Factoring Amendment, National Institute of Food Technology Bills passed in Lok Sabha amid din

The National Institute of Food Technology Entrepreneurship and Management Bill, 2022 got introduced and passed in just 8 minutes, making a record, even by recent standards

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Amid the uproar and chaos over various issues, including the Pegasus snooping controversy, the Lok Sabha on Monday passed the National Institute of Food Technology Bill and Factoring Amendment Bill without any debate, and in record time.

National Institute of Food Technology Bill

The National Institute of Food Technology Entrepreneurship and Management Bill, 2022 got introduced and passed in just 8 minutes, making a record, even by recent standards.

The bill seeks to declare the National Institute of Food Technology Entrepreneurship and Management at Kundli, and the Indian Institute of Food Processing Technology at Thanjavur as institutions of national importance and to provide for instructions and research in these fields.

The bill, which the Rajya Sabha had already passed in March, was piloted by the new Food Processing Industries Minister Pashupati Kumar Paras for consideration and passage.

Factoring Amendment Bill

FM Sitharaman, moving the Factoring Regulation (Amendment) Bill, 2020, for consideration and passage, said the changes in the legislation are aimed at helping the MSME sector. The amendments to the factoring law are based on the recommendations of the UK Sinha Committee.

Sitharaman added the government has accepted the recommendations of the Standing Committee, which last year scrutinised the bill. The bill seeks to widen the scope of entities that can engage in the factoring business.

"Increase in the availability of working capital may lead to growth in the business of the micro, small and medium enterprises sector and also boost employment in the country," according to the Statement of Objects and Reasons of the bill.

The amendments are expected to help micro, small and medium enterprises (MSMEs) significantly by providing added avenues for getting credit facility, especially through Trade Receivables Discounting System.

The Factoring Regulation Act, 2011, was enacted to provide for regulating the assignment of receivables to factors, registration of factors carrying on factoring business, and the rights and obligations of parties to the contract for assignment of receivables.

Factoring is a transaction where a business entity sells its receivables from a customer to a third party, which is a 'factor' for the immediate realisation of funds either in part or in full.

It may include invoice discounting, recourse factoring, non-recourse factoring, collections and reverse factoring. International factoring includes export factoring, import factoring, export invoice discounting, and reverse factoring.

The Factoring Regulation (Amendment) Bill, 2020, was introduced in the Lok Sabha on September 24, 2020, with a view to liberalise the restrictive provisions in the Act and at the same time ensure that a strong regulatory/oversight mechanism is put in place through the RBI.

Soon after the passage of these two bills, Rama Devi, who was in the chair, adjourned the Lower House for the day.

(With agency inputs)

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