Y P Bhagat, Kumar Keshav, Ranjeeta Singh Commentary on the Essential Commodities Act, 1955

1. Objective:

   • The Act was enacted with the goal of ensuring that essential goods are available to the general public at fair prices, especially during emergencies or situations of scarcity, such as famine, natural disasters, or war.
   • It helps to prevent price manipulation, hoarding, and black marketing that could otherwise make these essential items unaffordable or unavailable to the common people.

2. Definition of Essential Commodities:

   • The Act defines essential commodities as goods that are critical for the survival of the public, which include foodstuffs, medicines, fuels, and other items necessary for basic life functions.
   • The central government has the authority to add or remove items from this list, depending on prevailing circumstances or future needs.

3. Powers of the Government:

   • The Act empowers the central government to control the production, supply, and distribution of essential commodities. It can issue orders for:
     • Regulation of stocks: Restricting the holding of large quantities of essential goods to avoid hoarding.
     • Price control: Fixing maximum prices to ensure affordability.
     • Regulation of trade: Controlling the sale, storage, or transport of goods to ensure they reach the intended market or consumer.
   • The government can also seize stocks or goods in violation of these regulations.

4. Action Against Offenders:

   • The Act prescribes penalties for offenders who violate its provisions. These penalties may include fines, imprisonment, or both.
   • It allows for strict action against hoarders and black marketers, with the intent of ensuring that essential goods are not artificially made scarce.

5. Amendments to the Act:

   • Over time, the Act has been amended to suit changing circumstances. For example, the 2020 amendment allowed for the deregulation of essential commodities like cereals, pulses, and edible oils, unless there is a significant price rise or emergency. This aims to encourage free trade and reduce unnecessary controls.

Importance of the Act:

• Public Welfare: The primary purpose is the protection of public interests, especially during times of scarcity, price hikes, or natural disasters. It ensures that the essential needs of the population are met.

• Market Stability: By controlling prices and regulating stocks, the Act prevents speculative hoarding, which can otherwise destabilize markets and make essential goods unaffordable for most people.

• Empowering the Government: The Act gives the government the legal power to intervene directly in the market, something that is critical for maintaining social stability and fairness, particularly in times of crisis.

Criticisms and Challenges:

• Over-Regulation: Some critics argue that the Act’s provisions can sometimes lead to over-regulation, which may create inefficiencies in the market and stifle economic growth. In particular, the controls on prices and stocks may discourage private investment and trade.

• Limited Scope for Modern Markets: The Act was introduced in a period when the Indian economy was primarily agrarian and not as diversified or globally integrated as it is today. As such, its provisions might be considered less suitable for the current economic structure, especially in a more market-driven economy.

• Implementation Challenges: Despite its intent, enforcement of the Act has been difficult, especially in rural or remote areas, where the problem of hoarding and black marketing persists.