The Warehousing Act, 2007 Came into Force

The Warehousing (Development and Regulation) Act, 2007 came into force from 25 October, 2010.  The Indian government also decided to constitute a regulatory body, Warehousing Development and Regulatory Authority (WDRA), under the warehousing act, 2007.

The Warehousing Act, 2007 authorises registration of warehouses and issue of negotiable warehouse receipts in electronic format. The Introduction of negotiable warehouse receipt system in India will help the farmers to get better credit facilities and at the same time will protect financial institutions by reducing the risk factor involved while extending credit to farmers.

The pledging of agriculture produce in the form of negotiable warehouse receipts will result into increase in flow of credit to rural areas and reduced cost of credit. It will also ensure standardized grading, packaging, insurance and quality of warehouses. With the full implementation of The Warehousing Act, farmers would find it easy to take loans from the commercial banks against negotiable warehouse receipts and not resort to distress sales to take care of their urgent cash needs. The Warehousing Act will improve the standard of warehouses in India, since WDRA will register and issue accreditation to warehouses only on the basis of specific standards.

The Warehousing Act was legislated by the Indian Parliament in September, 2007 with a view to ensure that the farmers are able to keep their goods in certified warehouses and use the warehouses receipts as a negotiable instrument.

WDRA (Warehousing Development and Regulatory Authority) will have a chairperson and not more than two members. WDRA will register and accredit warehouses intending to issue negotiable warehouse receipts and put in place a system of quality certification and grading of commodities with a view to protecting the interests of holders of warehouse receipts against negligence, malpractices and fraud.
Warehouse is a storehouse in which food grains or good are stored.