Context: Central Warehousing Corporation (CWC), a Schedule ‘A’ Mini Ratna company, may be corporatized on the lines of Indian Airlines before it is divested or privatised after repealing the Warehousing Corporations Act, 1962.
About Central Warehousing Corporation:
- Central Warehousing Corporation (CWC), a Schedule ‘A’-Mini Ratna, Category-1, Central Public Sector Enterprise (CPSE) is a statutory body established under ‘The Warehousing Corporations Act, 1962’. State Warehousing Corporation has also been constituted under the same act as a statutory body.
- CWC has 50% equity in 19 State Warehousing Corporations (SWCs).
- Under the current law, State governments cannot return the 50 per cent equity of CWC in the SWCs.
Warehousing Corporations Act, 1962:
- Provides for the establishment of CWC and SWCs as statutory bodies by the Central and State governments respectively.
- Central Warehousing Corporation shall, in any case where the State Government has subscribed for fifty percent of such capital of SWCs, subscribe for the remaining fifty percent of the capital.
- This act repealed the Agricultural Produce (Development and Warehousing) Corporations Act, 1956
Functions of CWCs:
- Acquire and build godowns and warehouses at such suitable places in India or aboard as it thinks fit.
- Run warehouses for the storage of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities offered by individuals, co- operative societies and other institutions.
- Arrange facilities for the transport of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities to and from warehouses.
- Subscribe to the share capital of a State Warehousing Corporation.
- Act as agent of the Government for the purposes of the purchase, sale, storage and distribution of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities.
- Enter into, with the previous approval of the Central Government, joint ventures with any corporation established by or under any Central Act or any State Act or with any company formed and registered under the Companies Act, 1956 (1 of 1956) including foreign company or through its subsidiary companies, for carrying out the purposes of this Act.
- Note: the expression "foreign company" shall have the meaning assigned to it under clause (23A) of section 2 of the Income-tax Act, 1961 (43 of 1961)
- Establish subsidiary companies.
Functions of SWCs:
- Acquire and build godowns and warehouses at such places within the State as it may, after consultation with the Central Warehousing Corporation, determine.
- Run warehouses in the State for the storage of agricultural produce, seeds, manures, fertilizers, agricultural implements and commodities.
- Arrange facilities for the transport of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities to and from warehouses.
- Act as an agent of the Central Warehousing Corporation or of the Government for the purposes of the purchase, sale, storage and distribution of agricultural produce, seeds, manures, fertilizers, agricultural implements and notified commodities.
- Enter into, with the previous approval of the State Government, joint ventures with the Central Warehousing Corporation;
- Carry out such other functions as may be prescribed.
Financial aspects of CWC and SWCs:
- A Warehousing Corporation may, in consultation with the Reserve Bank and with the previous approval of the appropriate Government, issue and sell bonds and debentures carrying interest for the purpose of raising funds.
- Total amount of bonds and debentures issued and outstanding and of the other borrowings of the Corporation shall not at any time exceed ten times the amount of the paid-up share capital and the reserve fund of the Corporation.
- The bonds and debentures of a Warehousing Corporation may be guaranteed by the appropriate Government as to the repayment of principal and the payment of interest at such rate as may be fixed by the appropriate Government on the recommendation of the board of directors of the Corporation at the time the bonds or debentures are issued.
- A Warehousing Corporation may, for the purpose of carrying out its functions under this Act, borrow money
- from the Reserve Bank, or
- from the State Bank,
- from any [scheduled bank], or
- from such insurance company, investment trust or other financial institution as may be approved by the Central Government in this behalf.
- The Central Warehousing Corporation may borrow money from the Central Government and a State Warehousing Corporation may borrow money from the State Government and the Central Warehousing Corporation on such securities and on such terms and conditions as may be agreed upon between the borrowing Corporation and the lender, in each case.
Accounting and Auditing:
- Every Warehousing Corporation shall maintain proper accounts and other relevant records and prepare an annual statement of accounts including the profit and loss account and the balance sheet in such form as may be prescribed:
- In the case of the Central Warehousing Corporation, the accounts relating to the Warehousing Fund and the General Fund shall be maintained separately.
- The accounts of a Warehousing Corporation shall be audited by an auditor duly qualified to act as an auditor of companies under section 226 of the Companies Act, 1956.
- The said auditor shall be appointed by the appropriate Government on the advice of the Comptroller and Auditor-General of India.