Parliamentary panel supports financial autonomy to Central Warehousing Corporation
A Parliamentary panel has approved an amendment bill that seeks to provide financial and operational autonomy to PSU Central Warehousing Corporation.
The Warehousing Corporations (Amendment) bill, introduced in the Lok Sabha in December last year, aims to provide financial autonomy to the CWC by deleting a section, thereby withdrawing the government guarantee.
"The Committee expresses agreement with the amendment proposed in the bill, which will subsequently confer mini-ratna status to the Corporation," the Parliamentary Standing Committee on Food and Consumer Affairs said in a report tabled in Parliament today.
The CWC is a profit making firm since 1966-67 and paying consistently higher dividend to the government. Hence, "the provision under section 5 (1) under the Act towards government guaranteed dividend and repayment of principal is not required," it said.
However, the panel suggested the Food and Consumer Affairs Ministry to examine the option of 'buy back' of the share on mutually acceptable terms or alternatively make arrangements to list the shares on the stock exchange so that investor is given an opportunity to redeem the investment.
With mini-ratna status, CWC will be able to exercises financial and operational autonomy for incurring expenditure on new projects such as diversification, creation of more infrastructure and storage space, formation of joint ventures, subsidiaries and among others, the panel said.
The autonomy will entitle CWC to make capital expenditure on projects and modernisation without government approval up to Rs 500 crore or equal to its net worth.
It will also empower the Corporation to establish JVs and subsidiaries in India with ceiling on equity investment upto 15 per cent of the net worth of enterprise in one project, it added.