Govt proposes higher penalties for violations under warehousing development & regulation law

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The Centre has proposed amendments to the Warehousing Development and Regulation Act (WDRA), 2007 to make registration of godowns compulsory and to sharply raise the penalty for various offences, says a senior Food Ministry official.

In the amendment bill, the government has also proposed simplified registration process, accepting negotiable receipts only in electronic form, more powers to regulator Warehousing Development and Regulatory Authority (WDRA) to investigate, take enforcement action, impose monetary penalty and adjudication.

That apart, the government has proposed doing away with up to three year imprisonment for various offences but suggested significant increase in penalty from the current Rs 1 lakh for various offences, the official added.

According to the official, the Food Ministry has already sought inter-ministerial comments on the proposed changes to the act and will soon seek cabinet approval.

Thereafter, the amendment bill is likely to be placed in the monsoon session of Parliament. Since the registration is optional, the number of warehouses registered with WDRA is very low. Since the registration is optional, the number of warehouses registered with WDRA is very low.

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. After the passage of the amendment bill in Parliament, the government would undertake registration of third-party warehouses undertaken in a phased manner.

In the first phase, warehouses with capacity above 5,000 tonnes will be focused, followed by godowns with capacity above 1,000-5,000 tonnes and then above 100 tonnes capacity godowns, the official added. The official further said that WDRA registration ensures proper infrastructure and scientific warehousing of goods.

It will give confidence to the banks for increasing post harvest loans and increase liquidity in rural areas and farmers income. The official further said that WDRA registration ensures proper infrastructure and scientific warehousing of goods.

This will further boost pledge financing against electronic negotiable warehousing receipts and will put in place uniform warehouse standards improving efficiency and ease of doing business.