LS passes bill to do away with government support for CWC
19 March 2015
A bill seeking to absolve the government of its responsibilities as a guarantor of the Central Warehousing Corporation (CWC) was passed by the Lok Sabha on Wednesday, with consumer affairs minister Ram Vilas Paswan ruling out any move to privatise the 'mini-ratna' company.
The Warehousing Corporation (Amendment) Bill has a limited scope and was necessitated by a legal requirement, which said the government will not be a guarantor for a "grade one" mini-ratna company like CWC, Paswan said. 'Mini-ratna' is an Indian coinage for smaller state-owned firms that are making profits.
Paswan allayed concerns of several opposition members, including Congress leader Mallikarjun Kharge, over whether the government intended to disinvest its shares. He noted that the bill was a "baby" of the previous UPA government, which could not get it passed due to general elections around the corner.
"The question of privatisation does not arise ... I am a grassroots person and as far as issues like privatisation or interests of farmers and workers are concerned, nobody needs to be worried," he said, replying to a debate on the bill.
Strangely, Paswan said grain storage capacity in the country was adequate, but farmers at many places suffered from lack of centres where they can sell their produce.
This is odd because it is well known that a large proportion of grain produced in India rots due to lack of proper warehousing; even the Supreme Court has passed strictures against the government on the matter. But opposition politicians did not raise questions about this.
The warehousing bill was brought by previous UPA government in Lok Sabha and cleared by Parliamentary Standing Committee. However, it lapsed with the dissolution of 15th Lok Sabha.
Intervening in the debate, Kharge said once the government stops being its guarantor, the CWC may lose investors' trust.
K V Thomas (Cong) said he was the food minister when the UPA cabinet had cleared the bill and the issues flagged by Kharge were deliberated upon that time too.
The Bill says the corporation is a profit-making body which has neither taken any loan from the government nor is dependent on budgetary support.
According to the Statement of Objects and Reasons of the bill, the government has also not given any guarantee besides the payment of minimum guaranteed dividend as required under some provisions of the Act.
Therefore, as the CWC can manage its financial affairs on its own, the bill seeks to withdraw the guarantee of the government and absolves it of its responsibility of being the guarantor, it says.