Finance Minister Nirmala Sitaram announces a decision to amend Essential Commodities Act

Finance minister Nirmala Sitaram introduces the package where pulses, cereals, edible oil, oil seeds, onions and potatoes are out of essential commodities act. The NITI Ayog has in the past called that’s essential commodities act as a hindrance to farm exporters.


The removal of onions from essential commodities act is a bold move since there is a very long history of government intervention when ever onion prices surge.

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.”


With Deregulating some commodities from essential commodities act, the expectations are that trip he private investment in warehouse, agriculture and infrastructure:

  1. Increase in purchase from processor animals.
  2. Food and food processing companies can increase stocks.
  3. Farmers can sell at competitive price.
  4. Increase in farm exports fullstop no barriers on interstate trade of farm products.
  5. Legal Framework should be allowed for farmers to fix their own fare prize.
  6. A standard mechanism can bi enforced to get a predictable price.

Essential commodities act can be imposed on these commodities under exceptional circumstances.