Essential Commodities Amendment Bill

Subject: Acts

Context:

Lok Sabha passed the Essential Commodities (Amendment) Bill, 2020

Features of the Bill:

• The Bill will replace the Essential Commodities (Amendment) Ordinance which was promulgated on 5th June this year.
• The Bill seeks to amend the Essential Commodities Act, 1955 and empowers the central government in terms of production, supply, distribution, trade, and commerce of certain commodities.
• It also seeks to increase competition in the agriculture sector and enhance farmers’ income.  The bill aims to liberalise the regulatory system while protecting the interests of consumers.
• The bill empowers the central government to designate certain commodities including food items, fertilizers, and petroleum products as essential commodities.
• Supply of certain food items including cereals, pulses, potato, onions, edible oilseeds, and oils, can be regulated by the government under extraordinary circumstances as per the provisions of this bill.  The extraordinary circumstances include war, famine, extraordinary price rise and natural calamity of grave nature.
• The Essential Commodities (Amendment) Bill, 2020 empowers the central government to regulate the stock of an essential commodity that a person can hold.
• The provisions of the bill regarding the regulation of food items and the imposition of stock limits will however not apply to any government order relating to the Public Distribution System or the Targeted Public Distribution System.
• It requires that imposition of any stock limit on agricultural produce must be based on price rise.  A stock limit may be imposed only if there is: (i) a 100% increase in retail price of horticultural produce; and (ii) a 50% increase in the retail price of non-perishable agricultural food items.   The increase will be calculated over the price prevailing immediately preceding twelve months, or the average retail price of the last five years, whichever is lower.