The Hindu : National : States can impose stock limits for wheat, pulses

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Saturday, Aug 26, 2006

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States can impose stock limits for wheat, pulses

Special Correspondent

Importers may, however, be asked to declare the receipts and stocks stored by them

NEW DELHI: Concerned at the spiralling prices of essential commodities, the Centre has restored the powers of State Governments for imposing stock-holding limits for wheat and pulses under the Essential Commodities Act, 1955. This has been done on the assumption that there is speculative holding back of stocks, particularly wheat, in anticipation of further increase in prices.

However, import of these two commodities has been kept out of the purview of any State Government control. Importers may, however, be asked to declare the receipts and stocks stored by them.

The decision is to authorise the States to enforce restrictions on licensing requirements, permission for purchase, movement, sale, supply, distribution or storage for sale and stock limits of wheat and pulses for six months to augment domestic supplies and tide over the festival season. However, there will not be any restriction on inter-State movement of the commodities.

The move authorises the States to undertake de-hoarding operations for stored stocks of wheat to be offloaded in the open market. It has been necessitate because of delay in the arrival of imported wheat, low stocks and lower than expected wheat production this year.

The restriction on stock limits has been imposed following representations from some States for restoration of the powers under the Essential Commodities Act, 1955 for de-hoarding. Under the Act, the Centre is empowered to delegate formally the powers to the State Governments to issue control orders for regulating production, distribution, pricing and other trading aspects in respect of the commodities declared as essential. With a comfortable foodgrains stocks and in a liberalised economy, it was felt that controls should be lifted. Consequently, the Central Government, vide two orders dated February 15, 2002 and June 16, 2003 had removed licensing requirements, stock limits and movement restrictions on specified foodstuffs including wheat and pulses. These orders have now been rescinded for six months only, as per a decision taken by the Union Cabinet in its meeting on Thursday on a proposal of the Ministry of Food and Civil Supplies.

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