FAQ on the Essential Commodities Act

Some facts about its provisions and explanations about how it works

The Essential Commodities Act (ECA) was enacted by the Central Government in 1955 to control and regulate trade and prices of commodities declared essential under the Act. The Act is again in the limelight, as the Government is making it more stringent while bringing onions and potatoes under its purview. Here are some facts about its provisions that you may want to know and explanations about how the Act works.

What does the Act deal with?
The Act empowers the Central and state governments concurrently to control production, supply and distribution of certain commodities in view of rising prices. The measures that can be taken under the provision of the Act include, among others, licensing, distribution and imposing stock limits. The governments also have the power to fix price limits, and selling the particular commodities above the limit will attract penalties. Black marketing of essential commodities was a major problem in the past and this has now been controlled to a large extent. The Drug Price Control Order (DPCO) and such other orders have been issued under the powers of the ECA.

Which commodities does it cover? 

Seven major commodities are covered under the act. Some of them are:

1. Petroleum and its products, including petrol, diesel, kerosene, Naphtha, solvents etc
2. Food stuff, including edible oil and seeds, vanaspati, pulses, sugarcane and its products like, khandsari and sugar, rice paddy
3. Jute and textiles
4. Drugs- prices of essential drugs are still controlled by the DPCO  
5. Fertilisers- the Fertiliser Control Order prescribes restrictions on transfer and stock of fertilizers apart from prices

Through various amendments in the Act in the past, the government removed many products such as herbicides, fungicides and exercise books from its purview. Onions and potatoes will be added

In the past, several products such as iron and steel came under the ambit of the Act, but were removed later. The Union Cabinet has already decided to add onions and potatoes under the ECA, but the notification is still awaited. The notification will have several clarities such as executing authorities and stock limits, among others. Both the commodities had been removed from the ESA through an order on November 25, 2004.

Powers of Central and states governments
The Act empowers the Centre to order states to impose stock limits and bring hoarders to task, in order to smoothen supplies and cool prices. Generally the Centre specifies upper limits in the case of stock holding and states prescribe specific limits. However in case there is a difference between states and the Centre, the act specifies that the latter will prevail.

Penal provisions
At present, section 7(1) a (1) specifies offences which include violations with respect to maintaining records, books, filing returns and so on. Such offences are punishable with a jail term of between three months and a year.

Section 7(1) a (2) applies for major offences and embraces a large part of violations where punishment can extend up to seven years in jail.

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.

Proposal to make the Act tougher
The Central Government has now said that it wants to make offences under the Act non-bailable. Kirti Parekh, an advocate who specializes in the ESA says, “This means that only the court can grant bail under any Act, not the police. Major offences under the Act are non-bailable as Criminal Procedure Code says offences attracting a jail term beyond three years are non-bailable. There is a judgment in case of Prithviraj Shinde v. state of Maharashtra in this connection.”