BS primer: Essential Commodities Act

In 1955, the central govt implemented the Essential Commodities Act (ECA) to control and regulate the trade and prices of commodities declared essential under the Act. The Act is again in the news, with the govt bringing onions and potatoes under its purview.

What does the Act deal with and who implements it?
The Act empowers central and state governments to control the production, supply and distribution of certain commodities due to rising prices and to take measures, including licensing, distribution, stock limits, etc. Governments can also fix prices — selling particular commodities above the limit attracts penal action. The Act also helps deal with black-marketing.

Which commodities are covered under the Act?

• Petroleum and petroleum products.
• Food items, including edible oil and seeds, vanaspati, pulses, sugar cane and its products, and rice.
• Jute and textiles.
• Drugs: Prices of essential drugs are still controlled by the drug price control order.
• Fertilisers: The fertiliser control order prescribes restrictions on the transfer and stock of fertilisers, apart from prices.

Through various amendments, the government has, in the past, removed many products, including herbicides, fungicides and exercise books, from the purview of the Act. The Union cabinet has decided to bring onions and potatoes under the ECA, but a notification in this regard is awaited. The notification will clarify aspects such as executing authorities and stock limits. Both commodities were removed from the ambit of the Act through an order on November 25, 2004.

What powers do central and state governments have?
The ECA empowers the Centre to set stock limits for states and act on hoarders to ensure smooth supplies and cool prices. Usually, the Centre specifies upper limits in case of stock holding, while states prescribe the specific limits. However in case of difference between states and the Centre, the view of the latter prevails, the Act specifies.

What are the penal provisions under ECA?
Section 7(1) a (1) of the Act specifies violations related to maintaining records, books, filing returns, etc. Such offences are punishable with jail terms of three months to a year.

Section 7(1) a (2) applies to major offences, and involves jail terms up to seven years.

Who executes the Act?
Food and civil supply authorities execute the provisions of the Act. Generally, these authorities, along with local police, raid the premises of businessmen to ascertain whether or not there are violations. In case a state doesn’t want to accept the Centre’s suggestions on implementing any provision, it can do so. There are reports Maharashtra doesn’t impose stock limits for onions and potatoes and Uttar Pradesh doesn’t enforce the entire Act.

Will the Act be made more stringent?
The Centre has said it wants to make offences under the Act non-bailable. Kirti Parekh, an advocate specialising in ESA, says, “This means only courts can grant bail under the Act; the police cannot grant the bail. Major offences under Act are non bailable, as the Criminal Procedure Code says a jail term of more than three years is non-bailable.”