Lok Sabha Debates Discussion On The Motion For Consideration Of The Regulation Of Factor ... on 20 December, 2011 an> Title: Discussion on the motion for consideration of the Regulation of Factor (Assignment of Receivables) Bill, 2011 (Discussion not concluded). MR. CHAIRMAN: The House will now take up Item No. 30, Regulation of Factor (Assignment of Receivables) Bill, 2011. Hon. Minister. THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI NAMO NARAIN MEENA): Sir, on behalf of my senior colleague, the hon. Minister of Finance, Shri Pranab Mukherjee, I beg to move: “That the Bill to provide for and regulate assignment of receivables by making provision for registration therefor and rights and obligations of parties to contract for assignment of receivables and for matters connected therewith or incidental thereto, be taken into consideration. ” The Regulation of Factor (Assignment of Receivables) Bill, 2011 was introduced in order to provide a comprehensive legal framework for factoring business. After its introduction in March, 2011, the Bill was referred to the Standing Committee on Finance. The Committee has recommended enactment of the Bill subject to some modifications and the Government has accepted all major recommendations of the Standing Committee on Finance including exempting sale of agricultural produce or activity of commission agents from the factoring business and grant of Stamp Duty exemption to the factoring transactions. The Committee had also asked the Government to do wider consultations to ensure that there are no legal infirmities in the Bill. Accordingly, discussions with a law firm, legal experts, IBA and RBI were organized and based on the suggestions received some additional amendments have been suggested in the Bill basically to provide greater clarity on the role and responsibilities of the various parties to the assignment of receivables in a factoring contract. It is expected that the proposed legislation will provide a comprehensive legislative framework for development of factoring business in India by determining the rights, liabilities and obligations of the parties involved. MR. CHAIRMAN : Motion moved: “That the Bill to provide for and regulate assignment of receivables by making provision for registration therefore and rights and obligations of parties to contract for assignment of receivables and for matters connected therewith or incidental thereto, be taken into consideration.” श्री उदय सिंह (पूर्णिया):सभापति जी, सबसे पहले तो मैं यहां से बोलने की अनुमति आपसे चाहता हूं। सभापति महोदय : अनुमति दी जाती है। SHRI UDAY SINGH (PURNEA): Mr. Chairman, Sir, thank you very much. You have called me to speak on the Regulation of Factor (Assignment of Receivables) Bill. The name now stands changed to `the Factoring Regulation Act, 2011’. This change of name is also in the light of the recommendation of the Standing Committee headed by Shri Yashwant Sinha who said that the present name or the original name, `Regulation of Factor Assignment’ will create a confusion as if there already exists some kind of a legislation. This is an important Bill to the extent that the credit facilities to Micro, Small and Medium Enterprises will be easier for these units to get. … (Interruptions) मैं हिन्दी जानता हूं, लेकिन हिन्दी सारी बात नहीं कह सकता। आप कान में लगा लें, हिन्दी में सुनाई देने लगेगा। मुझसे ज्यादा अच्छी हिन्दी में आपको सुनाई देगा। यह मेरी इच्छा है कि मैं अंग्रेजी में बोलना चाहता हूं। Factoring as a business is the conversion of credit sales to cash sales. Therefore, firms especially the smaller ones which are starved for working capital, which find it difficult to access working capital, will find that factoring business will make their lives easier to a certain extent. But when we talk of the Micro, Small and Medium Enterprises, we are actually talking about a sector which contributes to 40 per cent of our exports and 45 per cent of our industrial production. But we treat this entire sector with great disdain. Therefore, my first submission to the hon. Minister is that when this Bill was being brought about did you think of consulting other Ministries to bring about a more holistic Bill in which the problems of the MSME industries as a whole was taken into account. I will come to the specifics of this Bill later and I will come to the specifics of MSME later, but before that I would like to say something about the state of the economy that we find ourselves in. Shri Pranab Mukherjee is not here. But through you, I would like to tell him that, `yes’ we have not reached a stage when we ne