Policy

To curb pulses price surge, Centre may invoke Essential Commodities Act

Our Bureau New Delhi | Updated on January 16, 2018 Published on September 12, 2016

Minister of Food and Public Distribution Ram Vilas Paswan

Cabinet nod for buffer-stock limit of 20 lakh tonnes for pulses

If retail prices of certain essential commodities, especially packaged pulses, do not come down, the Centre may soon invoke the Essential Commodities Act (ECA) to impose a limit on maximum retail price (MRP).

“ECA gives the government the power to impose limits on retail prices of 22 essential commodities. We may invoke the Act soon if packaged essentials do not come under control,” Food Minister Ram Vilas Paswan said at a press conference here on Monday, adding that the existing and stock limit for pulses and the export ban would continue.

Food Secretary Hem Pande told reporters that even as wholesale prices of pulses had come down, the retail prices were still high.

For instance, arhar wholesale was selling at ₹111/kg but was being sold at ₹119/kg at the retail level, urad wholesale was ₹122/kg, but retail prices were ruling at Rs 130/kg,” he said, adding that the “ideal gap between wholesale and retail prices should be between 0-15 per cent”.

Wholesale-retail gap

Pande said before invoking the Act, the Centre would study any “unprecedented” gap in wholesale and retail prices of the 22 commodities under the ECA, such as sugar, milk, edible oils among others, adding that under the Act, the Centre had the power to use it for imposing a limit on retail prices.

In a notification issued on September 7, the Food Ministry has modified the legal metrology (packaged commodities) rules that enable governments to fix retail prices. As per the modification, if the retail sale price of any essential commodity is “fixed and notified by the competent authority under the Essential Commodities Act, the same shall apply”.

The notification also says that once the government fixes and notifies the standard quantity such as 500 gram, 1 kg or 2 kg , retailers will have to comply with the norms.

If found violating the norms, the entire stock of a retailer can be seized or s/he may have to pay a fine of up to ₹ 5,000.

Paswan also said that the Centre would employ an independent agency to collect information about retail prices of essentials at the block/district/State level.

“We will not depend wholly on information provided by the States at present,” he added

Buffer limit hiked

Earlier in the day, the Cabinet Committee on Economic Affairs approved the Ministry’s proposal to increase the buffer stock for pulses up to 20 lakh tonnes. “The buffer stock will be built through domestic procurement and imports of 10 lakh tonnes each,” Paswan said.

Price Stabilisation Fund

He said requisite funds of ₹18,500 crore for this operation would be provided to the Price Stabilisation Fund scheme of the Department, for which the Ministry was in talks with the Finance Ministry.

The allocation/release of the pulses from the buffer stock would be made to States/Union Territories and Central Agencies.

“Pulses would also be released through strategic open market sale. For managing the buffer, professional pulses buffer management entity may also be engaged,” the CCEA decided.

Published on September 12, 2016
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