Centre to amend Warehousing Act

However, the Samyukt Kisan Morcha fears it will help corporate houses gain more control

July 28, 2022 03:23 am | Updated 03:23 am IST - New Delhi

The Ministry said amendment is to make registration of godowns compulsory and to raise the penalty.

The Ministry said amendment is to make registration of godowns compulsory and to raise the penalty. | Photo Credit: REUTERS

The Union Food and Public Distribution Ministry has suggested major amendments to the Warehousing (Development and Regulation) Act of 2007. While the Ministry says that the aim is to help farmers get access to the service of quality warehouses, the Samyukt Kisan Morcha (SKM) fears that the amendments are for bringing back certain provisions of the repealed the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act through the backdoor. An official in the Ministry said 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.

At present, the registration with the Warehousing Development and Regulation Authority (WDRA) is optional. After the proposed amendment, which is yet to be cleared by the Cabinet, registration of all third party warehouses throughout the country will be undertaken in a phased manner. “The Central government will have powers to exempt any class of warehouses from registration with the Authority. This will ensure a gradual and non-disruptive change to a regulated warehousing system,” the official said here on Wednesday.

The WDRA was established in 2010 to ensure scientific storage by prescribing infrastructural and procedural standards. 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. The official said the Centre wanted to make NWR a tool of trade to improve fiduciary trust of depositors and banks in Negotiable Warehouse Receipt System.

The SKM said the repealed Act had also talked about similar provisions such as electronic trading in transaction platform and freedom for trading at farmgate, cold storage, warehouse and processing units. “This time too, The purpose should be to help some big corporate houses so that they gain even more control over the warehousing and cold storage sector. The direction of every policy of this government is towards that. Even before the three farm laws passed, Adani had started building silos in several States. Through amending this Act, the Centre is trying to bring the repealed law through the backdoor,” said SKM leader Ashok Dhawale.

If amended, the Act will help in doing away with accreditation agencies. “Accreditation Agencies are not required, as the process was time-consuming, prone to malpractices and led to complaints,” the official said. 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 ₹1 lakh for various offences,” the official added.

The Ministry’s intention is to bring the Bill in the ongoing monsoon session of Parliament. At present, there are about 60,000 warehouses in the country. “Out of which, 4,700 warehouses have registered with the regulator but only 2,910 warehouses are active ones,” the official added.

In the first phase, the Centre plans to register warehouses with capacity above 5,000 tonnes followed by ones above 1,000-5,000 tonnes and then above 100 tonnes capacity. “This will help farmers/depositors to have access to a large number of buyers nationwide with better bargaining power,” the official said.

At present, the Authority is comprised of a chairperson and two full-time members. “After the amendment, three ex-officio part-time members will be added to the Authority including joint secretaries in Food and Economic Affairs departments and the Executive Director of the SEBI,” the official said and added that powers to investigate, take enforcement action, impose monetary penalty, recover monetary penalty and adjudication had been provided in the amendment.

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