13 April, 2020
5 Min Read
COVID-19 and Essential Commodities Act
Part of: GS Prelims and GS-II- Governance (PT-MAINS-PERSONALITY TEST)
The Essential Commodities Act, 1955 was enacted to ensure the easy availability of essential commodities to consumers and to protect them from exploitation by unscrupulous traders. The Act provides for the regulation and control of production, distribution and pricing of commodities which are declared as essential. The Act aims at maintaining/increasing supplies/securing equitable distribution and availability of these commodities at fair prices.
The Act empowers the Central and state governments concurrently to control production, supply and distribution of certain commodities in view of rising prices.
The State Governments are fully empowered under the Act to regulate production, distribution, supply and prices of the food items which are declared as essential commodities in the respective States. Thus the States are the implementing agencies to implement the EC Act, 1955 and the Prevention of Black marketing & Maintenance of Supplies of Essential Commodities Act, 1980, to ensure adequate availability of essential commodities at reasonable prices, by exercising powers delegated to them. This is reviewed periodically at the National level.
The list of essential commodities is reviewed from time to time with reference to their production and supply and in the light of economic liberalization in consultation with the concerned Ministries/Departments administering these commodities. Currently, the restrictions like licensing requirement, stock limits and movement restrictions have been removed from almost all agricultural commodities. Wheat, pulses and edible oils, edible oilseeds and rice are the exceptions, where States have been permitted to impose some temporary restrictions in order to contain price increase of these commodities.
Who executes the Act
Food and civil supply authorities execute the provisions of the Act. They generally raid the premises of the businessmen to find out violations along with the local police, who have the power to arrest. In case a state doesn’t want to accept the Centre’s suggestion on implementing any provision of the Act it can do so. There are reports of Maharashtra not imposing stock limits for onions and potatoes. UP is not enforcing the Act itself.
Which commodities does it cover?
Seven major commodities are covered under the act.
(ii) seeds of cattle fodder; and
(iii) jute seeds;
(iv) cotton seed
Economic Survey 2019-2020 recommends to scrap ECA,1955
Negatives of ECA,1955:
Benefits of the ECA,1955
Present Scenario of ECA,1955 during COVID19:
In recent years, there has been an argument that the EC Act was draconian and not suited for times when farmers face problems of plenty rather than scarcity. The Economic Survey 2019-20 argued that it hampered remunerative prices for farmers and discouraged investment in storage infrastructure.
But in the context of a crisis like the current one, the EC Act seems to serve a purpose. Bringing masks and sanitisers under the EC Act will enhance the availability of these products to the public, at fair prices.
Producers have been urged to manufacture these up to full capacity over three shifts. The government can take action against hoarders, speculators and those involved in jacking up prices or black-marketing. Besides this, quota restrictions on raw material holdings can be relaxed.
The MCA has asked all State governments to issue licences and permit hand-sanitiser makers to store ethanol and extra neutral alcohol (ENA) without any quota restrictions. The Indian Sugar Mills Association and All India Distilleries Association have been asked to ensure that ethanol and ENA are made easily available to producers. Reports indicate prices of ethanol and ENA can not be increased till June 30 and will need to be sold at the price levels as on March 5 this year.
Necessity of ECA,1955 during COVID19
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