Warehousing Development

• 03 Nov 2022

For Prelims: Warehouse Development and Regulatory Authority, Electronic Negotiable Warehouse Receipt

For Mains: Importance and Objectives of WDRA & E-NWR

Why in News?

Recently, a seminar on “e-NWR – An Effective Tool for Promoting Pledge Financing” was organised by the Warehousing Development and Regulatory Authority (WDRA) under the Department of Food and Public Distribution (DFPD) on the foundation day of WDRA.

What is Warehousing Development and Regulatory Authority?

• About:
  • It was constituted in 2010 under the Warehousing (Development and Regulation) Act, 2007.
  • It was an initiative of public policy where the benefits of technology had been transferred into benefits for farmer with the objective to make e-NWR a prime tool of trade, increase rural liquidity, increase farmers’ income, reduce post-harvest losses, etc.
• Objective:
  • The main objective of WDRA is to implement Negotiable Warehouse Receipt (NWR) System in the country.
  • The main functions of the Authority are to make provisions for the development and regulation of warehouses which interalia includes negotiability of warehouse receipts, registration of warehouses, promotion of scientific warehousing of goods, improving fiduciary trust of depositors and banks, enhancing liquidity in rural areas and promoting efficient supply chain.
• Achievements:
  • There had been an increase in the number of warehouses registered with WDRA and its outreach with banks and farmers had improved exponentially.
  • As of 2021-22, 123 warehouses are registered under WDRA issuing total of 17,975 e-NWR.

What is Negotiable Warehouse Receipt?

• About:
  • It was launched in 2011 by the Ministry of Consumer Affairs, Food & Public Distribution.
• Benefits:
  • 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 NWR in electronic form could be issued either as:
  • Electronic Negotiable Warehouse Receipt (e-NWR):
    • It has negotiability and can be used for deposit and withdrawal of commodities as well as trade transactions such as transfer and Pledge.
    • It was launched in 2017.
  • It has been integrated with the electronic National Agriculture Market (e-NAM) platform by providing an interface between e-NAM and repositories.
  • Electronic Non-Negotiable Warehouse Receipt (e-NNWR), which can be used only for deposit and withdrawal of commodities (generally issued for goods received in the warehouse with pending final assaying reports or if assaying is not desired by the applicant) without the facility of trade / transfer.

What is e-NWR Pledge Finance?

• Pledging is a process in which the holder of the eNWR will get a loan from the financial institution using the underlying commodity of eNWR as collateral.
• When a pledge is marked, the eNWR balances will remain in the client’s account (borrower) only but the control on the balance will be with the financial institution.
• The client will not be able to use the eNWR balances until the pledge in favour of the financial institution is active.

UPSC Civil Services Examination Previous Year Question:

Q. What are the impediments in marketing and supply chain management in developing the food processing industry in India? Can e-commerce help in overcoming this bottleneck? (2016)

Source: PIB