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  • Govt puts stock limits on onion & potato to check prices

    Published on July 3, 2014

    Cracking down further on hoarding, the Centre on Wednesday put onion and potato onions--621x414under purview of the Essential Commodities Act and imposed stock holding limits in a bid to improve availability and rein in prices.

    The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA), presided over by Prime Minister Narendra Modi in New Delhi on Wednesday, which also released additional 50 lakh tonnes of rice through PDS to give relief to poor.

    Stock holding limits, which will be set by state governments, will prohibit individuals from storing onion and potato beyond the prescribed ceiling. The stock holding limits will be in operation for the next one year.

    The CCEA has decided to bring onion and potato under the purview of the stock holding limits under the Essential Commodities Act, 1955.

    “With this, we are giving right to state governments to take stern action against hoarding and black marketing,” Law Minister Ravi Shankar Prasad told reporters on Wednesday.

    A notification in this regard will be issued on Thursday.

    Onion and potato were under the Essential Commodities Act during the period between 1999 and 2004.

    Stating that there are complaints that prices are rising despite adequate supply in the country, Prasad said the CCEA discussed the emerging situation seriously.

    The CCEA also decided to release 5 million tonnes of additional rice to BPL and APL families through public distribution system (PDS) in those states where food security law is not implemented.

    The additional rice, which will be over and above the normal PDS allocation, will be released from July to March.

    “We have sufficient supply. There is no need to panic. We are taking all possible measures to improve supply and control prices,” Prasad said, adding that the government was hopeful that the monsoon rain would improve from next week.

    The government is hoping good rains will wash away concerns of drought-like situations in certain parts of the country due to predictions of deficient monsoon.

    “Let’s not panic. Rain Gods will be smiling on India. Today it rained heavily in Delhi and Mumbai. The government hopes the rain will be ok in the coming weeks,” Prasad said.

    At present, pulses, edible oils and oilseeds are under stock limits till September, 2014. Storage curbs on rice and paddy will remain till November this year.


    The Essential Commodities Act is aimed at ensuring easy availability of essential food items and to protect consumers from exploitation by unscrupulous traders.

    The law provides for regulation and control of production, distribution and pricing of commodities under the law.

    Prasad said six states, including Delhi, West Bengal and Chhattisgarh, had sought permission to impose stock holding limits.

    Earlier in the day, the government hiked the minimum export price (MEP) on onions to USD 500 a tonne from USD 300 a tonne to boost domestic supply of the commodity and control prices that have risen in the last one month in anticipation of below normal monsoon affecting Kharif crops.

    Exports of potatoes are also curbed by imposing an MEP of USD 450 a tonne.

    In the national capital, retail prices of onion are in the range of Rs 25-30 per kg, up from Rs 15-20 a kg in May.

    The wholesale price at Lasalgaon in Nashik is Rs 18.50 per kg, up by about 80 percent from 1st June levels.

    Retail price of potato is Rs 27 per kg and wholesale price is Rs 16.75 per kg.

    Onion production is estimated to have risen to 192 lakh tonnes during 2013-14 crop year (July-June) from 168 lakh tonnes in 2012-13.