The central government has temporarily waived the need for states to seek its agreement for issuing orders under the Essential Commodities Act.
With this, state governments can issue orders and directions under the act without first seeking the approval of the center till June 30.
The Essential Commodities Act, passed in 1955, seeks to ensure the availability of certain commodities and products at reasonable costs to the population at large. The list of commodities includes foodstuff, drugs, fertilisers, pulses and edible oils, and petroleum and petroleum products.
Union Home Ministry also ‘urged’ states to ‘take urgent steps’ to ensure the supply of essential commodities.
It said it was apprehensive about a rise in prices of commodities due to the disruption in the production of certain essential items as a result of the ongoing lock-down imposed to prevent the spread of COVID-19.
“There are reports of loss of production due to various factors, especially reduction in labour supply. In this situation, the possibility of inventory building/hoarding and black marketing, profiteering, and speculative trading, and the resulting price rise of essential goods cannot be ruled out,” Home Secretary Ajay Bhalla said in a letter to all state chief secretaries.
“State/Union Territory Governments are advised to take urgent steps to ensure availability of these essential goods, by invoking provisions of the Essential Commodities (EC) Act 1955.
“These measures include fixing of stock limits, capping of prices, enhancing production, inspection of accounts of dealers and other such actions. Offences under EC Act are criminal offences and may result in imprisonment of 7 years or fine or both.
“State/Union Territory Governments may also consider detention of offenders under the Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980,” Bhalla said in his letter.
The Act has rarely been invoked in recent times, and was originally created in an atmosphere of frequent scarcity, famines and droughts in the pre-liberalization era.
After liberalization, the production of commodities and industrial products are allowed freely and their prices are largely determined by market forces.
India has enough buffer stock of food grains to overcome a disruption in food production for an entire year.
However, in case of other commodities — including spices, fruits and vegetables — such buffer stocks are not maintained to the same extent.
There are fears that the ongoing disruption in economic activities may lead to scarcity of certain items in the future.
