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Warehousing (Development and Regulation) Act, 2007

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The Government of India enacted the Warehousing (Development and Regulation) Act, 2007 (WDR Act), which came into force from the 25 October 2010. The Central Government constituted Warehousing Development and Regulatory Authority (WDRA) on the 26 October 2010 for implementation of the provisions of the Act.


Objectives of the WDR Act 2007

The main objectives of the Warehousing (Development and Regulation) Act, 2007 are to make provisions for the development and regulation of warehouses, negotiability of warehouse receipts, establishment of a Warehousing Development and Regulatory Authority (WDRA) and related matters.


Features of Warehousing (Development and Regulation) Act, 2007

 No person shall commence or carry on the business of warehousing for issuing negotiable warehouse receipts unless he has obtained a registration certificate from the WDRA after fulfilling the prescribed norms in respect of the concerned warehouse or warehouses.

The WDRA regulates and registers the warehouses in the country. Only a warehouse registered with WDRA can issue Negotiable Warehouse Receipts (NWRs).

WDRA follows a rigorous process of scrutiny before registering a warehouse. The process involves accreditation before registration with WDRA. WDR Act 2007 provides for appointment of independent accredited agencies for accreditation of warehouses meeting norms specified by WDRA. The warehouse should apply to an accreditation agency of its choice for issuance of an accreditation certificate.  WDRA-approved accreditation agencies are required to make annual visits to the registered warehouses to ensure continued compliance with prescribed requirements.

The WDRA has stipulated certain   specifications for registration of warehouse. Some of them are as follows:

 In order to help the farmers to avail themselves the benefits under the interest subvention scheme, the WDRA has simplified the process of registration of warehouses belonging to Primary Agricultural Cooperative Societies in close proximity to the farmers.

The WDRA in consultation with the National Horticulture Mission (NHM) and National Horticulture Board (NHB) has introduced negotiable warehouse receipt system in cold storages so that the growers/farmers producing horticultural produce may store these commodities in cold storages and may avail the benefits of loan against NWRs issued by the registered cold storages.

As per the Act, as on January 2016, WDRA has notified 123 agricultural commodities including cereals, pulses, oilseeds, vegetable oils, spices, edible nuts and miscellaneous items like rubber, tobacco, tea, coffee, makhana etc. for issuing NWRs. 26 horticultural commodities, such as Potato, Dehydrated Onion, Garlic, Ginger, Turmeric, Apples and Resins etc. have also been notified for issuing NWRs by cold storages.

The Act makes the warehouseman liable for loss of, or injury to, goods caused by his failure and also provides for compensation to the depositor of the goods

The Act also provides for punishment if the warehouseman knowingly issues a negotiable warehouse receipt without taking the actual physical delivery of the goods or without reasonably satisfying himself that the number, weight or grade of the goods corresponds to the number, weight or grade specified in the warehouse receipt.


Functioning of WDRA

Whenever any warehouse feels the need for issuing NWRs either because of demand from its consumers or due to competition, it approaches the WDRA for accreditation. The authority then sends a team of inspectors who judge the warehouse on various parameters like, whether the construction has been according to norms, does it have trained staff, is it equipped with modern pest control and fumigation facilities, its net worth, security, fire-fighting and goods weighing facilities. If the team is satisfied with the conditions, then WDRA issues a booklet containing the NWRs. The warehouse then issues these receipts to customers (farmers and people who have stored their produce in the godowns) in place of the normal receipt. As these receipts are recognised by the government, banks can easily grant loans against them. The farmer gets an officially recognised receipt against which he can take loan from bank for further farming activities or alternatively sell his produce to a third person by endorsing the receipt, without even taking physical possession.

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