Centre to amend Warehousing Act

Subject: Economy

Section: Agriculture

Context:

The Union Food and Public Distribution Ministry has suggested major amendments to the Warehousing (Development and Regulation) Act of 2007.
the amendment was to make registration of godowns compulsory and to raise the penalty for various offences and to do away with the jail term as a punishment for the offences.
Captive warehouses such as those of the Food Corporation of India are excluded from the ambit of the Act.
The Act wants to establish a system of negotiable and non-negotiable warehouse receipt (NWR) which is now in electronic form.
If amended, the Act will help in doing away with accreditation agencies.
The application for registration of warehouses will be submitted directly to the WDRA and a new system of online application, which will be contactless and faceless will be implemented and the average registration time will be reduced.
That apart, the government has proposed doing away with up to three years imprisonment for various offences but suggested significant increase in penalty from the current Rs 1 lakh for various offences

Negotiable Warehouse Receipt System

It was launched in 2011 but the Ministry of Consumer Affairs, Food & Public Distribution.
Farmers can seek loans from banks against the warehouse receipts issued to them against their storage.
These receipts issued by the warehouses registered with the WDRA would become a fully negotiable instrument backed by a Central legislation.
The Electronic Negotiable Warehouse Receipt (e-NWR) System was launched in 2017.

Warehousing Development and Regulatory Authority

It is a Statutory Authority under the Department of Food and Public Distribution, Government of India.
It was constituted in 2010 under the Warehousing (Development and Regulation) Act, 2007.
It regulates and ensures implementation of this 2007 Act for the development and regulation of warehouses.
It implements and regulates the Negotiable Warehouse Receipt (NWR) /electronic-NWR (e-NWR) System in the country.
It also promotes orderly growth of the warehousing business.
It consists of a Chairperson and two Members appointed by the Central Government.
It has also setup two Repositories, namely, M/s National Electronic Repository Limited (NERL) and CDSL Commodity Repository Limited (CCRL) for creation and management of electronic Negotiable Warehouse Receipts (e-NWRs).
All registered warehouses are mandated to issue only e-NWRs w.e.f 1^stAugust 2019.
The Recognized Stock Exchanges like National Commodity and Derivatives Exchange (NCDEX), Multi Commodity Exchange (MCX), Bombay Stock Exchange (BSE), National Multi Commodity Exchange (NMCE/ICEX) are using e-NWRs for settlement of derivative contracts.
The e-NWR has been integrated with electronic National Agriculture Market (e-NAM) platform by providing interface between e-NAM and repositories.