In a bid to enable better price realisation for farmers. the Centre has decided to amend the Essential Commodities Act whereby agriculture produce including pulses, onion, potato and cereals would be deregulated.
Edible oil and oilseeds will also be deregulated and driven by the market scenario.
Addressing the media here, Finance Minister Nirmala Sitharaman said that the Essential Commodities Act, 1955 was enacted in days of scarcity and there is need to enable better price realisation for farmers by attracting investments and making the agriculture sector competitive.
Under the amended Act, stock limit will be imposed under very exceptional circumstances like national calamities, or famine with surge in prices.
Further, no such stock limit shall apply to processors or value chain participants, subject to their installed capacity or to any exporter subject to the export demand.
Ajay Kakra, Leader - food and agriculture, PwC India said: "The decision to amend the Essential Commodities Act was long overdue. It's a correct measure to ensure supply chain continuity and trade flows in the event of short supplies/ exceptional circumstances. In an event like Covid, this will be helpful to control supply chain disruptions."
The amendment to ECA is a major move in terms of deregulation of agriculture, which employs the largest population in the country.
The announcements are part of the third tranche of the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday.
( With inputs from IANS )