Difficulties in acieving aims of WDRA Act2007

All across globe, a well-functioning warehouse receipt financing system based on public warehouses has the potential to reduce risks and transaction costs in collateralised financing, which may result in broad-based access to such financing and low costs. However, for this to be achieved, an enabling legal environment and institutional set-up need to be in place to instil trust in the system among financiers and commodity market participants and to safeguard its integrity. Only when the financial community has a high degree of confidence in the system will it lend against warehouse receipts, and interest rates will be reduced. Core elements of a well-developed warehouse receipt system include:

1 an enabling legal and regulatory framework; 2 a regulatory and supervisory agency; 3 licensed and supervised public warehouses; 4 insurance and financial performance guarantees; 5 banks familiar with the use of warehouse receipts.

Despite the differences among countries and legal traditions, an enabling legal framework should clearly define the following issues and related rules and procedures: i) the warehouse receipt’s legal status as a document of title or pledge; ii) rights and obligations of the depositor and the warehouse operator; iii) perfection of security interests (registration of the warehouse receipt or pledge); iv) protection of the warehouse receipt against fraud, and financial performance guarantees; v) priority for the claims of the holder of the warehouse receipt in case of borrower default or bankruptcy; and vi) clear procedures in case of bankruptcy of the warehouse operator and for the administration of financial performance guarantees.

Warehousing development & regulation Act 2007 was also meant to achieve the same objects, but the Act has not been designed to sync the basic and fundamental principles of commodity market financing as the Act has to achieve the basic goal of guarantee and trust of the warehouse receipt because of no powers to authority (WDRA) and hence teeth-less and which has to depend again on juridical proceedings for taking action against the defaulters. Secondly punitive actions are so harsh that no warehouse service provider will like to opt for registration. The punishments shall be for the regulatory lapses in the mechanism and system.But surprisingly the Act directly jumps into conclusive frauds and losses. It is a common sense that if the detailed mechanism for lapses found in different stages are worked out in the rules and the financial punitive powers are given to the Authority, then definitely a sense of regulatory control will lead to the desired level of collateral trusts in the ecosystem of financial performance guarantee.

Applicability of claw back policy on 10 crore families, a free healthcare policy

Modicare: Government to let market decide NHPS rateTo be rolled out from August 15, the scheme would provide 10 crore families a free healthcare policy of Rs 5 lakh/annum.By: FE Bureau July 3, 2018 5:59 AM

With ref to above news the Centre’s model tender document for empanelment of insurance companies under the NHPS have invited criticisms for not putting in a mechanism to equitably share both the profits as well as the burdens.

The said scheme to be rolled out from August 15,to provide 10 crore families a free healthcare policy of Rs 5 lakh/annum.

The said ambitious Centre’s model tender document for empanelment of insurance companies under the NHPS have invited criticisms for not putting in a mechanism to equitably share both the profits as well as the burdens. The document says that as per clawback policy, insurers would have to refund premiums to the government if claims ratio is less than 100%. However, if the claims ratio exceeds 120%, the excess amount will be equally shared by the insurance company and the state government.
The said claw back policy is nowhere in the insurance Act 1938 of india whereas the said clause is having mentioned in the context of recovery of commission from the insurance agents,in case the insured company or the person is not depositing premium whose business is brought by the agent.But here the Govt is proposing claw back policy in different context which is perhaps not supported by an act or law in commensurate with the insurance Act on the land of india.
It is therefore suggested that  Govt may review the stand taken on claw back policy in the given context so that the possibility of heavy litigation. in the future are ruled out.

India taking big strolls in agriculture

Exports of cereals from India grew by 34.36 per cent to USD 8.1 billion in 2017-18 on account of increasing demand in global markets, according to the commerce ministry.

Iran was the main importer of Indian cereals during the last financial year. India is the largest producer as well as the largest exporter of cereal products in the world, the ministry said in a series of tweets.

Cereals are among the top ten exported items from India. The other products include fabrics, engineering, chemicals and machinery.

This way India is taking big strolls in agriculture and I hope that India will be number one not only in agricultural production but also in the exports of Agricultural produces all over the world and will feed all the people of the world having scarcity the agricultural production and are not self sufficient for feeding their own population. I salute India

Farmers earning shall be economically viable.

60% of farmers in India, who cultivate less than 0.80 hectares of land,continue to be under the poverty line if they do not switch to a non-agricultural occupation. Overall, India’s agricultural output has been increasing on average 3.6% annually since 2011.

The blame goes to the government policies governing the food rather than the agriculture sector. The key problems identified are the trade restrictions specifically designed to keep domestic food inflation low, including frequent ban on exports and MSPs set mismatching the international prices. The Essential Commodities Act and the Agricultural Produce Market Committee Act, are as a few  examples of regulations hampering price discovery for farmers.

Controls imposed by the government on movement of food and exports at the slightest hint of inflation going up prevented farmers from realising higher prices from exports.

The hardest and strictest measures to be taken by the government is to control the marketing of Agricultural produces in the APMC Mandies,which are not regulating the farmers market properly to achieve desired results for which the APMC Act was originally formulated. Rather at present the said act is giving counter productive results by harrassing the farmers by not facilitating them in getting the prices as per the farmers input cost + transportation + his profit so that he may earning shall become economically viable.