Essential Commodities (Amendment) Bill 2020 | UPSC
Parliament passes the Essential Commodities (Amendment) Bill, 2020
WHY IN NEWS:
This bill will create a positive environment not only for farmers but also for consumers and investors: Shri Danve Raosaheb Dadarao
SYLLABUS COVERED: GS 2 : Bills
For PRELIMS note the definition , inclusions and exclusions of the essential commodities list.
For MAINS it is very important to keep an eye on the background and the new changes made . This can be part of your Mains 2020 exam . Let us dive in !
ESSENTIAL COMMODITIES (AMENDMENT) BILL, 2020
- Legislation will help in more investment in cold storages, modernization of food supply chain and bringing price stability.
- The Essential Commodities (Amendment) Bill 2020 has provisions to remove commodities like cereals, pulses, etc. from the list of essential commodities.
- The EC (Amendment) Bill 2020 aims to remove fears of private investors of excessive regulatory interference in their business operations.
- This will also attract private sector/foreign direct investment into agriculture sector.
- It will help drive up investment in cold storages and modernization of food supply chain.
- The Government, while liberalizing will also ensure that interests of consumers are safeguarded.
- However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such stock limit imposition.
- This will ensure that investments in agriculture are not discouraged.
- This amendment will also help to achieve the government’s promise to double the farmer’s income.
- While India has become surplus in most Agri-commodities, farmers have been unable to get better prices.
- The reasons include the lack of investment in cold storage, warehouses and processing.
- The export as the entrepreneurial spirit gets dampened due to Essential Commodities Act.
- The legislation will help drive up investment in cold storages and modernization of food supply chain.
- It will help both farmers and consumers while bringing in price stability.
- It will create competitive market environment and also prevent wastage of agri-produce that happens due to lack of storage facilities.
REGULATION OF FOOD ITEMS
- The Essential Commodities Act, 1955 empowers the central government to designate certain commodities (such as food items, fertilizers) as essential commodities.
- The Ordinance provides that the central government may regulate the supply of certain food items too .
- It including cereals, pulses, potatoes, onions, edible oilseeds, and oils, only under extraordinary circumstances.
(iii) Extraordinary price rise and
(iv) Natural calamity of grave nature.
- 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.
- The other way is – Average retail price of the last five years, whichever is lower.
- This amendment is required to prevent wastage of agri-produce due to lack of storage facilities.
- This amendment will create a positive environment not only for farmers but also for consumers and investors .