The union cabinet has decided to exempt exporters having IEC code issued by the Directorate General of Foreign Trade (DGFT) from the purview of stock holding limits under the Essential Commodities Act, 1955 with respect to edible oilseeds, edible oils and rice.
This will help exporters benefit from economies of scale and bigger operation for optimally meeting export demands on a long-term basis, an official release said on Thursday.
The exemption would, however, be subject to the condition that the wholesaler or retailer or dealer having IEC issued by DGFT is able to demonstrate that whole or part of his or her stocks in respect of edible oil, edible oilseeds and rice are meant for exports.
Such stocks meant for exports will be excluded from the calculation of stock limits.
The cabinet also approved a proposal for extending the validity of the order relaxing controls under the Essential Commodities Act, 1955, for paddy and rice, for one more year, ie, from 1 December 2013 to 30 November 2014.
The main objective of order is to enable state governments to continue to take effective de-hoarding operations under the Essential Commodities Act, 1955 by fixing stock limits / licensing requirements etc in respect of these commodities, especially in view of rising prices in the prevailing circumstances.
This is expected to help in the efforts being taken to tackle the problem of rising prices and also improve the availability of these commodities for the general public especially the vulnerable sections, according to a government release.
The central government had, in August 2006, decided to keep in abeyance certain provisions of the order dated 15 February 2002 in respect of wheat and pulses, with the approval of the cabinet initially for a period of six months.
The validity of this order has been extended from time to time incorporating also some more essential commodities such as edible oils, edible oilseeds, rice, paddy and sugar.
The validity of all these orders has been extended from time to time.
At present stock limits are permitted for pulses, edible oils and edible oilseeds for a period up to 30 September 2014 and in respect of rice and paddy up to 30 November 2013.
Wheat and sugar have been withdrawn from the ambit of these orders with effect from 1 April 2009 and 1 December 2011, respectively.