In 2010, the Warehousing Development and Regulatory Authority (WDRA) was established under the Warehousing (Development and Regulation) Act, 2007. The organization is maintained by the Department of Food and Public Distribution (DFPD). Recently, to celebrate the foundation day of WDRA, a seminar titled “e-NWR – An Effective Tool for Promoting Pledge Financing” was convened.
Purpose and Functions of WDRA
The main purpose of the WDRA is to apply the Negotiable Warehouse Receipt (NWR) System across India. The organization’s operations include creating provisions for warehouse development and regulation, promoting scientific warehousing of products, enhancing trust among depositors and banks, increasing liquidity in rural regions, and facilitating an efficient supply chain. They also manage the negotiability aspect of warehouse receipts and the registration process of warehouses.
Achievements of WDRA
There has been a noticeable growth in the number of warehouses registered with WDRA, and its outreach to banks and farmers has significantly improved over time. As per the 2021-22 data, 123 warehouses have been registered under WDRA and it has issued a total of 17,975 e-NWRs.
Negotiable Warehouse Receipt: A Closer Look
In 2011, the Negotiable Warehouse Receipt (NWR) was introduced by the Ministry of Consumer Affairs, Food & Public Distribution. It serves as assurance for farmers who are granted loans by banks against their stored crops. This receipt becomes fully negotiable, backed by central legislation, once it is issued by the warehouses registered under WDRA.
Electronic Negotiable Warehouse Receipt Types
NWRs can be issued in two electronic forms. The first is the Electronic Negotiable Warehouse Receipt (e-NWR), launched in 2017, which allows for the deposit and withdrawal of commodities as well as trade transactions like transfers and pledges. It has been integrated with the electronic National Agriculture Market (e-NAM) platform to create a connection between repositories and e-NAM. The second type is the Electronic Non-Negotiable Warehouse Receipt (e-NNWR) primarily used for deposits and withdrawals of goods without the facility of trade/transfer.
Understanding e-NWR Pledge Finance
Pledging involves using eNWRs as collateral to secure a loan from a financial institution. When a pledge is marked, the eNWR balances remain in the borrower’s account but are controlled by the financial institution. This balance cannot be utilized by the client until the pledge in favour of the financial institution is active.
Potential Hurdles and the Role of E-commerce
While there are several impediments in marketing and supply chain management that hinder the growth of the food processing industry in India, the adoption of e-commerce could potentially help overcome these bottlenecks. By leveraging digital platforms, it could enhance accessibility, promote transparency, and streamline processes, thereby improving the overall scenario.
To conclude, the WDRA and its initiatives such as the implementation of e-NWR have played a crucial role in promoting rural liquidity, increasing farmers’ income, reducing post-harvest losses among other benefits. Notwithstanding the significant strides made, overcoming the challenges faced by the food processing industry in India requires concerted efforts and innovative strategies like the adoption of e-commerce.
