Indian government empowers States to deal with high Potato Prices

The Narendra Modi government on Tuesday decided to bring onions and potatoes under the Essential Commodities Act (ECA) to curb black marketing and hoarding, blamed for recent surge in prices. This will empower states to impose caps on stocks of these two vegetables for traders.

While onions were re-included in the Act 10 years after it was delisted by the previous United Progressive Alliance (UPA) regime, potatoes got included on the list for the first time.

The decision was taken by the Cabinet Committee on Economic Affairs.

Stockholding limits, which will be set by state governments, will prohibit individuals from storing onions and potatoes beyond the prescribed ceiling. The Act is aimed at ensuring easy availability of essential food items and protecting consumers from exploitation by unscrupulous traders. The law provides for regulation and control of production, distribution and pricing of commodities.

"With this, we are giving the right to state governments to take stern action against hoarding and black marketing," Law Minister Ravi Shankar Prasad told reporters here. He said the government now hoped states would act against hoarding and black marketing of onions and potatoes.

A notification in this regard will be issued on Wednesday. The minister said any decision on banning export of onion and potatoes would depend on the circumstances then.

The order will be in force for one year after which it will be reconsidered. Six state governments - Delhi, Chhattisgarh, Madhya Pradesh, Mizoram, Tripura and West Bengal - had demanded re-introduction of onions and potatoes in the ECA to help them take action against hoarders.

These were removed from the Act in 2004 by then agriculture and food minister Shared Pawar. In the previous NDA government, the order was enforced from 1999 to 2004.