Centre to amend Warehousing Act

  • July 28, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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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 1stAugust 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.
Centre to amend Warehousing Act economy