What is Essential Commodities Act (ECA) 1955?

National Affairs

What is Essential Commodities Act (ECA) 1955?

30 Jul 2023 Zinkpot 154

The Essential Commodities Act (ECA) is a parliamentary act that governs the delivery and supply of commodities or products whose obstruction could affect the lives of common people to a great extent.
This act came into force in 1955 and was modified through the Essentials Commodities Amendment Act, 2020.
Through the provisions of this act, the government intends to control the price rise of essential commodities like drugs, fertilizers, pulses, edible oil, cereals, oil seeds, petroleum and allied products, and fruit and vegetable seeds.
The Central government can include new commodities when needed and exclude them from the list once the situation improves.
Under this act, the government can also fix the maximum retail price of any packaged product declared an ‘essential commodity’.
Due to this act, the commodities which qualify as ‘essential’ are not subjected to unfair profiteering and are safeguarded from the risk of irrational spikes.
The act stands against the black market practitioners and hoarders that hamper the smooth working of the market.
Because of the act, the state agencies have the power to conduct raids in order to catch the defaulters and subject them to harsh punishments. The act also empowers the agencies to sell the raided goods via shops with fare prices, or in some scenarios, the excess stocks can be auctioned.
As per the new amendment, the commodities like onion, potatoes, cereals, edible oil, oilseeds, etc, are removed from the essential list, except in extraordinary circumstances like famine, war, natural calamities, etc.
It further specifies that a stock limit can only be imposed if there is a 50% rise in the retail price of non-perishable agricultural foodstuff over the price prevailing in the preceding 12 months or the average retail price of the last five years, whichever is lower.
It gives the freedom to produce, hold, move, distribute, and supply that will attract the private sector or foreign direct investment into the agricultural sector.
This act was under scrutiny because this law might affect the urban and rural, poor consumers who get grains under the Public Distribution System (PDS).
Moreover, there were fears that this will give the traders the freedom to purchase and store any quantity, hence, indulging in hoarding.