[Presidential Assent] Essential Commodities (Amendment) Act, 2020: Under what circumstances can government impose stock limits? Explainer

The Essential Commodities (Amendment) Bill, 2020 received Presidential Assent on 26-09-2020.

The Essential Commodities (Amendment) Act,  2020

Which Act will this bill amend?

The Essential Commodities Act, 1955.

Which Sections will the said Bill amend?

Section 3 talks about the Powers to control production, supply, distribution, etc., of essential commodities

(1)―If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, [or for securing any essential commodity for the defence of India or the efficient conduct of military operations], it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.

Insertion of sub-section (1 A) after sub-section (1) in Section 3.

‘(1A) Notwithstanding anything contained in sub-section (1),—

(a) the supply of such foodstuffs, including cereals, pulses, potato, onions, edible oilseeds and oils, as the Central Government may, by notification in the Official Gazette, specify, may be regulated only under extraordinary circumstances which may include war, famine, extraordinary price rise and natural calamity of grave nature;

(b) any action on imposing stock limit shall be based on price rise and an order for regulating stock limit of any agricultural produce may be issued under this Act only if there is—

(i) hundred per cent. increase in the retail price of horticultural produce; or

(ii) fifty per cent. increase in the retail price of non-perishable agricultural foodstuffs, over the price prevailing immediately preceding twelve months, or average retail price of the last five years, whichever is lower:

Provided that such order for regulating stock limit shall not apply to a processor or value chain participant of any agricultural produce if the stock limit of such person does not exceed the overall ceiling of installed capacity of processing, or the demand for export in case of an exporter:

Provided further that nothing contained in this sub-section shall apply to any order, relating to the Public Distribution System or the Targeted Public Distribution System, made by the Government under this Act or under any other law for the time being in force

The gist of the above-introduced amendment:

  • Regulation of Certain food items under extraordinary circumstances.
  • Stock Limit shall be imposed by the Government.

Read the amended Act, here: ACT

Ministry of Law and Justice

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