The Essential Commodities

(Amendment) Bill 2020

Presented By : Pranali
Kothe
UAN : 2020-M-17051991
Program : MBA BIS Sem
1(HR)
Course : Managerial
 Content
 Background
• Why Essential Commodities act was
passed?
• What are Essential Commodities ?
• What happens when commodity is declared
essential?
 Power of Government
 Major Amendments in Essential
Commodities Act
 Essential Commodities Act 2020
• What is amendment?
• Under what circumstances can government
impose stock limit?
• Why the change now?
• Impact
• Arguments
 BACKGROUND
WHY ESSENTIAL COMMODITIES ACT WAS PASSED ?

• BASIC OBJECTIVE To
: Prevent hoarding and black marketing of foodstuffs.
 The Essential Commodities Act is an act of Parliament of India which was established
to ensure the easy availability and of delivery of certain commodities or products to
the consumers to protect them from exploitation.

 Passed on 1April , 1955

 This act was legislated at a time when country was facing scarcity of foodstuffs.

 Main Purpose of this Act was to control the production , distribution and supply
of these commodities.
 BACKGROUND
WHAT ARE ESSENTIAL
COMMODITIES
 Essential commodities are defined as “Goods considered essential to maintain a
minimum acceptable standard of living.

 Bu there is no specific definition of essential commodities in the Essential Commodities

Act , 1955.

 Section 2(A) states that an “essential commodity’ means a commodity specified in the
Schedule of the Act.

 The act give power to central government to add or remove a commodity in the
schedule.

 Ministry of Consumer Affairs, Food and Public Distribution implements the Act.

 ITEMS : Drugs, Fertilizers, Foodstuffs, Cotton, Petroleum and petroleum products; Raw
jute , Seeds.

 New Items : Mask and Hand Sanitizers (was till June 30)
 BACKGROUND
What Happens When The Commodity is Declared Essential ?

If any commodity is declared essential,

government can control
• Production
• Supply
• Distribution
• Impose a stock limit.
 Power of Government
Cultivatio Distributio
Production Storage Sale Price
n n

 Power to issue order regarding Production & Distribution of Essential

Commodities.

 Power to fix prices of Essential Commodities

 Power to appoint Authorized Controllers

 Power of Confiscation of Essential Commodities

 Power to Impose Penalties

 MAJOR AMENDMENTS IN ESSENTIAL
COMMODITIES ACT
● Pulses edible oilseeds and edible oils (storage control) order 1977

● Essential Commodities Act, 1980

● Essential Commodities (Special, Provision) Act, 1981

● Drugs Price Control Order (DPCO) 1995

● Essential Commodities Act, 2006

● Essential Commodities Act, 2010

 ESSENTIAL COMMODITIES AMENDMENT
ACT 2020
What is the Amendment ?
 The Amendment introduces a new Subsection
(1A) in Section 3

 Under this section, the supply of certain

foodstuffs can be regulated only under
extraordinary circumstances.

An Extraordinary circumstances
means price rise, war, famine and
natural calamity.
 Earlier, there were no reasons to add or
remove any commodities it was under
government whether to add or remove.

 Amendment exempts food processors, value

chain participants & exporters .
 ESSENTIAL COMMODITIES ACT
Under what circumstances can government impose
stock limits?
 1955 Act did not provide a clear framework impose stock limits.

 Amendment has clauses for stock limiting. E.g. war, famine and natural calamities.

 Amendment also has clause of “PRICE TRIGGER” to counter extraordinary price

rise and impose stock limits.

 EX.
• Horticultural produce

• Non-perishable agricultural foodstuffs.

 WHY THE CHANGES NOW?

Production Capacity 1955 vs 2019

The 1955 Act was 120
110

legislated at time when 100

100

country was facing

80
scarcity of foodstuffs.
60

Situation has changed

40
now. 25 25
20
10 10
India has become
0
exporter of several Wheat Rice Pulses 0 0

agricultural products. 1995 Column1

 WHAT WILL BE THE IMPACT OF
AMENDMENT IN THE ACT
Promotes Contract Farming

Promotes Direct Marketing

Foreign Investment

Promotes Privatization
 ARGUMENTS
Government Arguments
 Changes seek to free agricultural
markets from the limitations imposed
by APMC
 Changes seek to attract private
investment in the value chain of
commodities and in post-harvesting
activities.
Counter
Arguments
 The opposition says that the
amendment will only benefits the
hoarders.
 They say that price triggers
envisioned in the Bill are unrealistic
 References
 www.thehindu.com

 www.Economictimes.indiatimes.com

 Wikipedia

 https://consumeraffairs.nic.in/
Thank You!