NEW DELHI :
Finance minister Nirmala Sitharaman said on Friday the Essential Commodities Act, a more than six decade old law that empowers government to impose curbs on stocking of farm produce, will be amended to make it in tune with the times and to attract investments into the farm sector.
Amending the Essential Commodities Act of 1955 is among the 11 measures Sitharaman announced to reform and to improve infrastructure and logistics facilities needed for giving a big push to the sector, the largest employer in the economy.
The idea is to remove the provisions that empower government to specify stock restrictions once needed in an era of food shortages.
“Now the ECA needs an amendment. That amendment is largely towards making sure that cereals, edible oils, oil seeds, pulses onions and potatoes will completely be deregulated. Therefore, unless there is an extraordinary situation, there is no requirement to invoke ECA. Stock limits will be imposed only in exceptional situations such as national calamity, famine or if there is a huge surge in prices,” Sitharaman said explaining the rationale for amending the law.
No stock limit shall apply to food processors or value chain participants subject to installed capacity, the minister said the move will ensure that export demand for India’s farm produce is not affected.