AMENDMENT TO ESSENTIAL COMMODITIES ACT 1955

Amendment to Essential Commodities Act 1955

Recently, the Essential Commodities (Amendment) Ordinance, 2020 was promulgated on June 5, 2020 to make amendment to Essential Commodities Act, 1955

Amendment to Essential Commodities Act 1955

Top Current Affairs 5th June 2020

Source | PRS India


GS Paper II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.



AMENDMENT TO ESSENTIAL COMMODITIES ACT 1955

Key Takeaways

  • Recently, the Essential Commodities (Amendment) Ordinance, 2020 was promulgated on June 5, 2020 to make amendment to Essential Commodities Act, 1955
  • The Act empowers the central government to control the production, supply, distribution, trade, and commerce in certain commodities.

Read More: THE KARNATAKA GRAM SWARAJ AND PANCHAYAT RAJ (AMENDMENT) BILL, 2020


Context: Recently, the Essential Commodities (Amendment) Ordinance, 2020 was promulgated on June 5, 2020 to make amendment to Essential Commodities Act, 1955.

What is important in Essential Commodities (Amendment) Ordinance, 2020 from UPSC Point of View?

  • What powers are provided by the Act to the Central Government? : The Act empowers the central government to control the production, supply, distribution, trade, and commerce in certain commodities.
    • The Act empowers the central government to designate certain commodities (such as food items, fertilizers, and petroleum products) as essential commodities.
    • The central government may regulate or prohibit the production, supply, distribution, trade, and commerce of such essential commodities.
    • The Act further empowers the central government to regulate the stock of an essential commodity that a person can hold.

Also Read: THE ESSENTIAL COMMODITIES ACT, 1955



  • What does the Essential Commodities (Amendment) Ordinance, 2020 propose? : The Ordinance seeks to increase competition in the agriculture sector and enhance farmers’ income.
    • The Ordinance provides that the central government may regulate the supply of certain food items including cereals, pulses, potato, onions, edible oilseeds, and oils, only under extraordinary circumstances.
    • These include:
      • (i) war,
      • (ii) famine,
      • (iii) extraordinary price rise and
      • (iv) natural calamity of grave nature.
    • The Ordinance requires that imposition of any stock limit on certain specified items must be based on price rise. A stock limit may be imposed only if there is:
      • (i) 100% increase in retail price of horticultural produce; and
      • (ii) 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, or the average retail price of the last five years, whichever is lower.
    • The Ordinance provides that any stock limit will not apply to a processor or value chain participant of agricultural produce if stock held by such person is less than the:
      • (i) overall ceiling of installed capacity of processing, or
      • (ii) demand for export in case of an exporter.
    • A value chain participant means a person engaged in production, or in value addition at any stage of processing, packaging, storage, transport, and distribution of agricultural produce.
    • The provisions of the Ordinance regarding the regulation of food items and the imposition of stock limits will not apply to any government order relating to the Public Distribution System or the Targeted Public Distribution System.
    • Under these systems, food grains are distributed by the government to the eligible persons at subsidised prices.

Read More: J&K Civil Services (Decentralization & Recruitment) Act



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