A bill seeking to make the mini-ratna company Central Warehousing Corporation (CWC) an independent body without the government being a guarantor was introduced in the Lok Sabha on Thursday.
The amendment to the existing Warehousing Corporation Act, 1962, has been proposed by the Food and Consumer Affairs Ministry to absolve the Central government of the responsibility of being a guarantor of the CWC.
The Warehousing Corporation (Amendment) Bill, 2011, envisages removal of some sections referring to the government's guarantee. “The government has so far given no other guarantee to the Corporation except for the payment of minimum guaranteed dividend as required under sub-section (1) of Section 5 of the Act. The guarantee referred to in the said sub-section of Section 5 would be withdrawn,” as per the statement of objects and reasons of the Bill.
“Section 5 of the Act is proposed to be suitably revised with consequential changes in Sections 27, 30, 31 and 39,” it said.
The CWC has consistently paid dividend to the government since its inception in 1957 and its net worth has been positive 2003 onwards. Also, the Corporation has not taken any loan from the Central government and is also not dependent on budgetary support, it has said.
Running 476 warehouses
The CWC is operating 476 warehouses across the country with a storage capacity of 10.18 million tonnes providing warehousing services for a wide range of agricultural and industrial products.
The government also introduced a bill in the Lok Sabha to increase the authorised capital of Export Import Bank of India (Exim Bank) from Rs.2,000 crore to Rs.10,000 crore.
The proposed amendment to the Exim Bank Act 1981 will allow the government to infuse the capital in the bank and help the lender expand its funding activities for the export sector.
Enabling provision
According to the statement of objects and reasons of bill, the amendment “would enable the Exim Bank to make fresh borrowing, borrow fund commitments under export line of credits, strengthen the capital base, enable the bank to enhance single or group borrowers' exposure limit and comply with the regulatory requirement.”
The Exim Bank was set up in 1981 with an authorised capital of Rs.500 crore. Its capital was gradually increased to Rs.2,000 crore in 2007.
The amendment also seeks to authorise the Centre to increase its capital in future through an executive order.
