20 April, 2020
7 Min Read
Essential Commodities Act
Part of: GS-II- Governance and recent act (PT-MAINS-PERSONALITY TEST)
In news recently: Government puts masks and hand sanitisers under Essential Commodities Act.
ECA enacted by Parliament in 1955 provides for the regulation and control of production, distribution and pricing of commodities which are declared as essential.
Aim: Maintaining/increasing supplies/securing equitable distribution and availability of these commodities at fair prices. The Centre can include new commodities as and when the need arises, and can take them off the list once the situation improves (in view of public interest).
States are the implementing agencies to EC Act, 1955
What is Essential Commodities Act?
The ECA was enacted way back in 1955.
It has since been used by the Government to regulate the production, supply and distribution of a whole host of commodities it declares ‘essential’ in order to make them available to consumers at fair prices.
The list of items under the Act include drugs, fertilisers, pulses and edible oils, and 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.
Under the Act, the government can also fix the maximum retail price (MRP) of any packaged product that it declares an “essential commodity”.
How it works?
But, why the recent Economic Survey said that this act is outdated and must go?
Why is it important?
The ECA gives consumers protection against irrational spikes in prices of essential commodities.
The Government has invoked the Act umpteen times to ensure adequate supplies.
It cracks down on hoarders and black-marketeers of such commodities.
State agencies conduct raids to get everyone to toe the line and the errant are punished.
Without the ECA the common man would be at the mercy of opportunistic traders and shopkeepers. It empowers the government to control prices directly too.
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