Essential Commodities Amendment Bill, 2020

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Introduced: Lok Sabha (14th Sept 2020)

Passed: Lok Sabha (15th Sept 2020)

Passed: Rajya Sabha (22nd Sept 2020)

Present status: Received assent on 26th Sept 2020 & converted to Act. But recently the government has repealed the Act.

Ministry: Consumer Affairs and Food Distribution


  • Essential Commodities (Amendment) Bill, 2020 amends the Essential Commodities Act, 1955.
  • Aim: To increase competition in the agriculture sector and enhance farmers’ income. It also aims to remove fears of private investors of excessive regulatory interference in their business operations.

Key Features of Essential Commodities (Amendment) Bill, 2020

  • Regulation on food items: Under the Essential Commodities Act, 1955, the Government regulates the production, supply and distribution of certain commodities it declares ‘essential’ in order to make them available to consumers at fair prices. The bill removes cereal, pulses, oilseed, edible oil, onion and potatoes from the list of essential commodities.
  • Stock Limit: It requires that imposition of any stock limit on agricultural produce must be based on price rise. 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.

Issues with Essential Commodities (Amendment) Bill, 2020

  • Undermining Food security: Easing of regulation of food items would lead to exporters, processors and traders hoarding farm produce during the harvest season, when prices are generally lower, and releasing it later when prices increase. This could undermine food security since the States would have no information about the availability of stocks within the State.
  • Deregulation of food items– As the bill removes cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities, it will deregulate the production, storage, movement and distribution of these important food commodities.
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