Opinion Another anti-reform thrust
Given the price increase,something seems to be brewing in the Essential Commodities Act.
Given the price increase,something seems to be brewing in the Essential Commodities Act (ECA). It will presumably be tightened up. In any event,an amendment bill was pending,primarily because of sugar. ECA will now be tightened to handle black-marketeers and hoarders and a working group of CMs (Gujarat,AP,Maharashtra,Tamil Nadu) has been formed,to reflect on recommendations made by an earlier conference of
CMs (in February 2010).
ECA may seem to date from 1955,but its origins go back to Defence of India Rules,1939,and war-time shortages. It imposes controls on production,supply and distribution of essential commodities and the act itself defines some items as
essential in Section 2.
There were relaxations in 2005 and Section 2 now only includes drugs,fertilizers,food-stuffs (edible oils),hank yarn,petroleum products,jute products,seeds of food products,cattle fodder and cotton. However,other sections of the statute allow Central and State governments to decree that other items are
essential. In addition,there was the Essential Commodities
(Special Provisions) Act of 1981,scrapped in 1998.
Lets also not forget that there is a parallel Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act of 1980. It is a separate matter that given the state of our criminal justice system,there have been few convictions under this.
ECA and its orders didnt reduce shortages. Non-reform of
agriculture has led to shortages (and inflation) now. Land has been diverted to other uses. Commercialization (such as through production of sugar-cane) has led to land being diverted away from onions. There are several perverse incentives that result from minimum support (and procurement) prices. The website of the Ministry for Consumer Affairs,Food and Public Distribution still states the following. As per the decisions of the Conference of Chief Ministers held on 21 May
2001,a Group of Ministers and Chief Ministers had been constituted which recommended that the regulatory mechanism under the Essential Commodities Act,1955 should be phased out.
Accordingly,the restrictions like licensing requirement,stock limits and movement restrictions have been removed from almost all agricultural commodities.
The central government is consistently following the policy of removing all unnecessary restrictions on movement of goods
across the State boundaries as part of the process of globalization simultaneously with the pruning of the list of essential commodities under the said Act to promote consumer interest and free trade.
The number of essential commodities which stood at 70 in the year 1989 has been brought down to 7 at present through such periodic reviews.
Precisely,but we now want to roll back,decide that more commodities are essential and re-introduce the Special Provisions Act of 1981.
This is in consonance with the anti-reform thrust of the present
government.
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