Union Cabinet approves historic amendment to Essential Commodities Act

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  • The has approved a historic amendment to the .
  • This amendment removes commodities like cereals, pulses, oilseeds, edible oils, onion, and potatoes from the list of essential commodities.
  • Earlier, a stock limit was imposed on food processing companies subject to their installed capacity and on exporters subject to the export demand.
  • This stock limit has been removed now.
  • This stock limit will be imposed under very exceptional circumstances like national calamities, famine with a surge in prices.
  • The Essential Commodities Act enables the government to regulate the production, supply and distribution of essential commodities in order to make them available to consumers at fair prices.
  • This prevents wholesalers, retailers, food processing companies, and exporters from stockpiling it beyond a certain quantity.
  • This, in turn, resulted in lower prices for farmers.
  • This amendment is expected to bring more foreign investments in and also to boost domestic industries.
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