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Essential Commodities (EC) Act 1955

Why in news?

MHA writes to States to ensure availability of Essential Goods, by invoking provisions of the Essential Commodities (EC) Act 1955, under Lockdown to fight COVID-19.

Details:

Offences under the EC Act are criminal offences and may result in imprisonment of seven years or fine or both.

The State and Union Territory governments may also consider detention of offenders under the Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980

Ministry of Consumer Affairs, Food & Public Distribution is authorising States and Union Territories to notify orders under the EC Act, 1955 by relaxing the requirement of prior concurrence of the Central government up to June 30, 2020

Background:

Essential Commodities Act

  • The ECA is an act which was established to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or black-marketing would affect the normal life of the people.
  • The ECA was enacted in 1955. This includes foodstuff, drugs, fuel (petroleum products) etc.
  • 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.
  • Additionally, the government can also fix the maximum retail price (MRP) of any packaged product that it declares an “essential commodity”.
  • The list of items under the Act includes drugs, fertilizers, pulses and edible oils, and petroleum and petroleum products.

How it works?

  1. 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.
  2. The States act on this notification to specify limits and take steps to ensure that these are adhered to.
  3. Anybody trading or dealing in a commodity , be it wholesalers, retailers or even importers are prevented from stockpiling it beyond a certain quantity.
  4. 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.

What are Food Items covered under it?

  • The items covered include rice, wheat, atta, gram dal, arhar dal, moong dal, urad dal, masoor, dal, tea, sugar, salt, Vanaspati, groundnut oil, mustard oil, milk, soya oil, palm oil, sunflower oil, gur, potato, onion and tomato.
  • Based on the deliberations, Government takes various measures from time to time to stabilize prices of essential food items which, inter-alia, include appropriately utilizing trade and fiscal policy instruments like import duty.
  • The govt. can impose stock limits and advise State for effective action against hoarders & black marketers etc. to regulate domestic availability and moderate prices.
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