THE ESSENTIAL COMMODITIES ACT, 1955

THE ESSENTIAL COMMODITIES ACT, 1955

Context: Indian State of Kerala, has brought bottled water under the purview of the Essential Commodities Act, 1955. 

ESSENTIAL COMMODITIES ACT, 1955

KEY INFORMATION

Bottled drinking water has come under a price cap in Kerala, with the State making it an essential commodity and fixing a ceiling of Rs 13 per litre. The current retail price is Rs 20. Government views current prices as exploitation of consumers, makes it an essential commodity. The government had also decided to make BIS standards mandatory for all brands of bottled water. This would force unauthorised manufacturers to shut shop. KEY FEATURES OF THE ESSENTIAL COMMODITIES ACT 1955 The Essential Commodities Act is an act which was established to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or blackmarketing would affect the normal life of the people. This includes foodstuffdrugsfuel (petroleum products) etc. The list of items under the Act include drugsfertiliserspulses and edible oils, and petroleum and petroleum products. The Centre can include new commodities as and when the need arises, and take them off the list once the situation improves. COVERAGE: This 1955 Act extends to whole of India. DEFINITION: The Act contains specific definition for the following: 

  • “Collector” includes an Additional Collector and such other officer, not below the rank of Sub-Divisional Officer.
  • “Food-crops” include crops of sugarcane. 
  • “Sugar” means-
  • Any form of sugar containing more than 90% of sucrose, including sugar candy;
  • Khandsari sugar or bura sugar or crushed sugar or any sugar in crystalline or powdered form; or
  • Sugar in process in vacuum pan sugar factory or raw sugar produced therein.

WORKING: If the Centre finds that a certain commodity is in short supply and its price is spiking, it can notify stock-holding limits on it for a specified period. The States act on this notification to specify limits and take steps to ensure that these are adhered to. Anybody trading or dealing in the commodity, be it wholesalersretailers or even importers are prevented from stockpiling it beyond a certain quantity.

INTERFERENCE OF STATE: A State can, however, choose not to impose any restrictions. But once it does, traders have to immediately sell into the market any stocks held beyond the mandated quantity. This improves supplies and brings down prices. As not all shopkeepers and traders comply, State agencies conduct raids to get everyone to toe the line and the errant are punished. The excess stocks are auctioned or sold through fair price shops. 

LIST OF ESSENTIAL COMMODITIES: Essential Commodities in India have been declared in section 2 of Essential Commodities Act, 1955. The essential commodities in India are as follows:

  • Cattle fodder, including oilcakes and other concentrates. 
  • Coal, including coke and other derivatives. 
  • Components parts and accessories of automobiles. 
  • Cotton and woollen textiles. 
  • Foodstuffs, including edible oilseeds and oils. 
  • Iron and Steel, including manufactured products of Iron & Steel.
  • Paper, including newsprint, paperboard and strawboard. 
  • Petroleum and Petroleum products. 
  • Raw Cotton, either ginned or unginned and cotton seed. 
  • Raw Jute. 

The following commodities are also declared as essential through notifications: 

  • Jute textiles. 
  • Fertilizer, whether inorganic, organic or mixed. 
  • Yarn made wholly from cotton. 
  • Seeds of food crops and seeds of fruits and vegetables.
  • Seeds of cattle fodder  
  • Jute seeds.

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