New Delhi: The Essential Commodities (Amendment) Bill, 2020 has been passed in Lok Sabha on Tuesday. The Bill seeks to amend the Essential Commodities Act, 1955.

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What is the bill about?

The Essential Commodities (Amendment) Bill, 2020 seeks to increase competition in the agriculture sector and enhance farmers' income. It aims to liberalise the regulatory system while protecting the interests of consumers.

The Bills introduced in the Lok Sabha on Monday are the Farmers'' Produce Trade And Commerce (Promotion And Facilitation) Bill; Farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill; and Essential Commodities (Amendment) Bill.

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What is the act of 1955?

The Essential Commodities Act was enacted to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or blackmarketing would affect the normal life of the people. This includes foodstuff, drugs, fuel (petroleum products) etc.

Government used the Act to regulate the production, supply and distribution and of a whole  host of commodities it declares ‘essential’ in order to make them available to consumers at fair prices.

Additionally, the government can also fix the maximum retail price (MRP) of any packaged product that it declares an “essential commodity”.

Here is the list of current essential items: Drugs, Fertilisers, Pulses & Edible Oils, And Petroleum And Petroleum Products.

What does the bill seek to change?

The bill empowers the central government to designate certain commodities including food items, fertilizers, and petroleum products as essential commodities. Supply of certain food items including cereals, pulses, potato, onions, edible oilseeds, and oils, can be regulated by the government under extraordinary circumstances as per the provisions of this bill.  The extraordinary circumstances include war, famine, extraordinary price rise and natural calamity of grave nature.

It also empowers the central government to regulate the stock of an essential commodity that a person can hold.

The provisions of the bill regarding the regulation of food items and the imposition of stock limits will however not apply to any government order relating to the Public Distribution System or the Targeted Public Distribution System.

It will also deregulate agriculture produce such as pulses, onion, potato and cereals, edible oils and oilseeds, with aim of better price realisation for farmers.