UGC NET Paper 1 Mathematical Reasoning & Aptitude.pdf
Impact of regulatory changes in warehousing & storage business in india (wdra 2007)
1. GenEx Logistics Beyond borders Impact of Regulatory changes on Warehousing in India : Warehousing Development & Regulation Act 2007 (WDRA 2007) www.genexlog.com
2. Context of Discussions Evolution of Warehousing / Storage Historical Perspective Business perspective Current State of Warehousing in India Future Trends in Warehousing business What is WDRA? Why do we need it? What are the impacts of WDRA on Business?
4. Warehousing – Historical Evolution (Regulatory History) Public Warehousing in India for Supply Chain Management or Logistics ?? Why Public Warehousing ? As warehousing needs huge capital investments with low returns, Public warehousing was inevitable 1928 Royal Commission on Agriculture recommended establishments of licensed warehouses. 1954 All India Rural Credit Survey Committee Reiterated the need for Warehousing in Public Sector 1956 Agriculture Produce (Development & Warehousing Corporation) Act, 1956 passed.
5. Warehousing – Historical Evolution (Regulatory History) 1962 Warehousing Corporation Act, 1962 for creation of Warehousing. Central & State Warehousing Corporation (CWC & SWCs) were established under this Act 2005 WDRA Bill 2007 WDRA Act Public Sector – More than 2000 Warehouses = 54 million tons Total capacity in Private Sector is 300 million tons out of which 8% is in the organized sector.
17. Few Visible Growth drivers of the Economy Growths driven by demographics and population: Large population of 1.1bn (UN 2005) : India has a high consumption base. 45% under 20 years of age: Large numbers to participate in the creation of wealth. Middle class of approx 340m with increasing spending power. Some of the many growing industries: Telecommunication: 771m mobile phones (as on Jan’11) as per TRAI Automotive: World’s largest motorcycle manufacturer; Increased outsourcing of automotive ancillaries to India. Drugs and Pharma: 4th largest in the world Information Technology: World’s 3rd largest optical media manufacturer; 2nd largest software developers. Gems and Jewellery: World’s largest exporter of diamond jewellery Sourcing hub of Ready Made Garments India is emerging as a potential and important outsourcing / manufacturing hub.
18. Warehousing – Issues and Challenges No adequate warehousing infrastructure. Warehousing does not exist as a concept in town planning Warehousing adds to the cost, and also increases the touch points that might deteriorate the product. Substantially losses to the economy every year due to inadequate Warehousing
20. WDRA 2007 (Warehousing Development Regulation Act 2007) An Act enacted by Parliament in the Fifty-eighth Year of the Republic of India to: Make provisions for the development and regulation of warehouses, Negotiability of warehouse receipts WDRA 2007 will lead to: standardization of the warehousing activities in the country, efficient price discovery for warehoused products, use of negotiable warehousing receipts which are fundamental to the competitiveness of the industry. Possible inclusion of warehousing in the town planning and thereby availability of land pockets for warehouse development. No Distress sales by the farmers
21. Impact of WDRA – Significance to Farmers Avoid Distress Sales by Farmers Obtaining of finances against the stored produce Higher returns to farmers Higher level of protection though enhanced standards of warehousing infrastructure. Reduction in losses by adoption of standardized storage practices. Enhanced scope for trading through Spot/Future commodity exchanges Effective dispute redressal mechanism and quick compensation of loss/damage Efficient Supply Chain Reduced dependency in Money Lenders.
22. Impacts of WDRA – Significance to Insurance Cos and Banks Enhanced scope for lending due to increased confidence in the system. With a legal framework available, Banks / Insurance companies would have an increased role in the warehousing business (especially farm sector) by way of funding individuals/groups. Insurance companies would also have increased business opportunities as insurance will be an essential requirement before issuing NWRs due to the liabilities of the warehouseman in the WDR Act. With a stable NWR system in place, owners of inventory can borrow foreign currencies for which real interst rates are lower, against inventories of export comodities, thereby hedging against the foreign exchange risk of foreign borrowing. This practice is followed in Kenya and Uganda where coffee stocks are often financed in Pound Sterling. Reduction in cost of finance and Risk
23. Impacts of WDRA – Other Significance Reduction in Logistics and Transportation Cost Increase in warehousing business by enhanced utilization by the farmers. Expansion of the warehousing in Rural areas thereby making the facilities more accessible. Expansion of cottage industry in rural areas Enhancement of employment in the rural areas. Stabilizes prices by balancing demand and supply Faster delivery system Legal Empowerment
24. For More Details Contact: Mansingh Jaswal Director GenEx Logistics (GenEx LogiSolutions Pvt. Ltd.) 681, Sec 16B, Pocket B, Dwarka, New Delhi - 110075 Tel: +91-11-28035020 Mobile: +91-9810404438 Email: mj@genexlog.com www.genexlog.com http://mansinghjaswal.blogspot.com