Essential Commodities Act

From Wikipedia, the free encyclopedia

Essential Commodities (Amendment) Act, 1955
Emblem of India.svg
Parliament of India
Long title
  • An Act to provide, in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in, certain commodities.
CitationAct No. 10 of 1955
Territorial extentRepublic of India
Enacted byParliament of India
Enacted1955
Status: In force

The Essential Commodities Act (ECA) is an act of the Parliament of India that was established to ensure the delivery of certain commodities or products, the supply of which, if obstructed due to hoarding or black marketing, would affect the normal life of the people. This includes foodstuff, drugs, fuel (petroleum products) etc.[1][2]

The ECA was enacted in 1955 and has since been used by the Government to regulate the production, supply, and distribution of a whole host of commodities that it declares ‘essential’ to make them available to consumers at fair prices. Additionally, the government can also fix the minimum support price (MSP) of any packaged product that it declares an “essential commodity”.

The list of items under the Act includes drugs, fertilizers, pulses, and edible oils, as well as petroleum and petroleum products. The centre can include new commodities as and when the need arises, and take them off the list once the situation improves.

Usage[]

If the Centre finds that a certain commodity is in short supply and its price is spiking, it can notify stock-holding limits on it for a specified period. The States act on this notification to specify limits and take steps to ensure that these are adhered to. Anybody trading or dealing in the commodity, be it wholesalers, retailers, or even importers are prevented from stockpiling it beyond a certain quantity.

A State can, however, choose not to impose any restrictions. But once it does, traders have to immediately sell into the market any stocks held beyond the mandated quantity. This improves supplies and brings down prices. As not all shopkeepers and traders comply, State agencies conduct raids to get everyone to toe the line and the errant are punished. The excess stocks are auctioned or sold through fair price shops.

Background[]

The ECA was enacted in 1955 and has since been used by the Government to regulate the production, supply, and distribution of a whole host of commodities that it declares ‘essential’ to make them available to consumers at fair prices.

On 14 March 2020, the Union Government brought masks and hand-sanitizers under the act to make sure that these products—key for preventing the spread of COVID-19—are available to people at the right price and in the right quality during the COVID-19 pandemic in India.[3] As of 1 July 2020, however, the Government has removed masks and hand-sanitizers from its Essential Commodity List.

Essential Commodities (Amendment) Act 2020[]

In May 2020, Finance Minister Nirmala Sitharaman suggested that the Act will be amended and stock limit will be imposed only under exceptional circumstances such as famine or other calamities. There will be no stock limit for processors and supply chain owners based on their capacity and for exporters based on the export demand.[4][5] It would also end some punitive measures. It will also deregulate agricultural produce such as pulses, onion, potato and cereals, edible oils, and oilseeds, to realize better prices for farmers.[5]

The Essential Commodities (Amendment) Ordinance was promulgated on 5 June 2020.[6] The Lok Sabha passed the ordinance to amend Essential Commodities Act on 15 September 2020, and Rajya Sabha passed it on 22 September 2020.[7] On 27 September 2020, the bill became an act after receiving approval from President Ram Nath Kovind.The Act has been already gazetted .[8]

The ordinance amends the Essential Commodities Act to allow the Government of India to delist certain commodities as essential, allowing the government to regulate their supply and prices only in cases of war, famine, extraordinary price rises, or natural calamities. The commodities that have been deregulated are food items, including cereals, pulses, potatoes, onion, edible oilseeds, and oils.<ref>{{Cite web|date=2020-06-03|title=Cabinet amends Essential CommoditiEssential Services Maintenance Act

References[]

  1. ^ "Ministry of Consumer Affairs of the Government of India. Official Website. Annual Report 2005 - 2006, Chapter IV, 'Essential Commodities Act 1955'". Archived from the original on 5 November 2011. Retrieved 9 May 2012.
  2. ^ "ECA, 1955". Archived from the original on 25 September 2012. Retrieved 10 October 2013.
  3. ^ "Masks, sanitizers put under Essential Commodities Act". @businessline. Retrieved 25 March 2020.
  4. ^ NEWS, OMMCOM (15 May 2020). "Centre To Amend Essential Commodities Act; Deregulate Pulses, Onion". ommcomnews.com. Retrieved 19 May 2020.
  5. ^ a b "Explained | Amendments to Essential Commodities Act". Moneycontrol. Retrieved 19 May 2020.
  6. ^ Ministry of Law and Justice (Legislative Department), Government of India (5 June 2020). "Essential Commodities (Amendment) Ordinance" (PDF). E-Gazette of India. Retrieved 30 July 2020.
  7. ^ "Lok Sabha clears bill to amend Essential Commodities Act". The Economic Times.
  8. ^ Parliament, Indian. "Essential Commodities (Amendment) Act 2020" (PDF). egazette.nic.in. Retrieved 26 December 2020.{{cite web}}: CS1 maint: url-status (link)
Retrieved from ""