Essential Commodities (Amendment) Act, 2020
Historical text and explanation of Act No. 22 of 2020, which amended Section 3 of the Essential Commodities Act, 1955 by inserting sub-section (1A).
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Overview of the 2020 amendment
The Essential Commodities (Amendment) Act, 2020 was enacted to amend the Essential Commodities Act, 1955. Its principal substantive change was the insertion of Section 3(1A), which limited the circumstances in which certain foodstuffs could be regulated and prescribed price-rise thresholds for specified stock-limit action.
The amendment covered foodstuffs such as cereals, pulses, potato, onions, edible oilseeds and oils when specified by the Central Government by notification. It also contained exclusions concerning processors, value-chain participants, exporters and orders relating to the Public Distribution System or Targeted Public Distribution System.
Section 1 - Short title and commencement
(1) This Act may be called the Essential Commodities (Amendment) Act, 2020.
(2) It was deemed to have come into force on 5 June 2020.
Amendment to Section 3 of the Essential Commodities Act, 1955
The 2020 amendment inserted sub-section (1A) after Section 3(1). In substance, the inserted provision stated that specified foodstuffs could be regulated only under extraordinary circumstances such as war, famine, extraordinary price rise and a natural calamity of grave nature.
Section 3(1A)(a) - Historical provision:
The supply of specified foodstuffs, including cereals, pulses, potato, onions, edible oilseeds and oils, could be regulated only under extraordinary circumstances which could include war, famine, extraordinary price rise and natural calamity of grave nature.
Stock-limit conditions introduced in 2020
The inserted Section 3(1A)(b) linked stock-limit action for agricultural produce to specified price-rise thresholds.
| Category | Threshold stated in the 2020 amendment |
|---|---|
| Horticultural produce | 100% increase in retail price. |
| Non-perishable agricultural foodstuffs | 50% increase in retail price. |
The comparison contemplated by the amendment was with the price prevailing immediately before the preceding twelve months or the average retail price of the preceding five years, whichever was lower.
The amendment defined a "value chain participant", in relation to an agricultural product, to include participants from production in the field to final consumption, including processing, packaging, storage, transport and distribution, where value is added at each stage.
A further proviso excluded orders relating to the Public Distribution System or Targeted Public Distribution System made under the Essential Commodities Act, 1955 or any other law then in force.
Repeal and savings in the 2020 Act
Section 3 of the 2020 Amendment Act repealed the Essential Commodities (Amendment) Ordinance, 2020. It also contained a savings clause providing that anything done or action taken under the Essential Commodities Act, 1955 as amended by that Ordinance would be treated as done or taken under the corresponding provisions as amended by the 2020 Act.
Current legal position after the Farm Laws Repeal Act, 2021
The Farm Laws Repeal Act, 2021 repealed the Essential Commodities (Amendment) Act, 2020. It also amended the Essential Commodities Act, 1955 by omitting sub-section (1A) of Section 3. Accordingly, the special 2020 framework described above is of historical relevance and is not the current operative Section 3(1A).
For present law, readers should consult the latest consolidated text of the Essential Commodities Act, 1955 and any control order, notification or delegated legislation applicable to the commodity and date in question.