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Union Budget
Warehousing sector awaiting positive outcome from the Union Budget 2014-15
Poor post-harvest lending by banks is affecting farmers' willingness to deposit their produce in warehouses as banks are mostly giving crop loans, said Dinesh Rai, chairperson of the Warehousing Development and Regulatory Authority (WDRA) at an event organised industry body ASSOCHAM in New Delhi today.

"Currently 97 per cent lending is against crop loan i.e. against the inputs and very little lending is against warehouse receipts," said Rai while inaugurating a national summit on 'Warehousing India: Issues, concerns & opportunities,' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

"In the last year's budget Rs 5,000 crore were provided from Rural Infrastructure Development Fund (RIDF) exclusively for the warehousing sector, we are eagerly waiting for this year's budget and hoping for something similar or may be more as finance is a significant issue," said Rai, according to an Assocham statement.

"This money is at concessional finance and for the first time NABARD has agreed to give it to private players," he added.

Hoping for a positive outcome in the upcoming Union Budget 2014-15 for warehousing sector, the WDRA chairman also said that passage of goods and services tax (GST) would help promote the warehousing sector.

"For successful logistics' operation there is need for multi-modal operations and integrations and it will be possible only if all the modes are working to their optimum capacities," said Rai.

He also said that there is a need for states to simplify their licensing policy as it is hampering the growth of warehousing sector.

Lack of trained manpower is another area of weakness in warehousing sector, said Mr Rai. "We should have good training programmes even in the management institutions in logistics and warehousing and this will definitely help in development of warehousing sector."

Warehouses have become a key part of supply-chain management as growth of organised retail is driving logistics and warehousing infrastructure for quality space and so more scientific warehouses are required, he added. "Capacity addition in warehousing sector requires commensurate improvement in supply chain infrastructure in terms of handling, storage and transport and this will help bring down costs." 

In his address at the ASSOCHAM national summit, B.B. Pattanaik, managing director, Central Warehousing Corporation said that land is the most critical need for warehousing sector. "Land is the biggest issue in warehousing sector as it is becoming extremely difficult to procure land to set up a warehouse at strategic and potential places owing to issues like land use problem, conversion of land use from agriculture to industrial."

The government can earmark the land and develop warehousing zones on the lines of SEZ and IT zones, said Pattanaik. "Most part of the land available to government belongs to agricultural universities, erstwhile agriculture market committee yards, erstwhile non-functioning agriculture farms of state governments can be developed as agri-warehousing zones and can be allotted to private sector on PPP mode or lease basis to develop specifically for agri-warehouse to address the land issue."

"Total lack of automation in warehousing, dearth of trained manpower, lack of authentic data to develop policies and lack of infrastructure are significant issues dogging the domestic warehousing sector," added the MD, CWC.

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