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PHARMD GURU Page 1 INTRODUCTION: This Act may be called the Essential Commodities Act, 1955. It extends to the whole of India. The Essential Commodities Act, 1955 is a Central Act. It gives powers to control production, supply, distribution, etc. of essential commodities for maintaining or increasing supplies and for securing their equitable distribution and availability at fair prices. Using the powers under the act, various Ministries/ Departments of the Central Government have issued Control Orders for regulating production/ distribution/ quality aspects / movement, etc. pertaining to the commodities which are essential and administered by them. The Essential Commodities Act is being implemented by the State Governments/ UT Administrations by availing of the delegated powers under the act. The State Governments/ UT Administrations have issued various control orders to regulate various aspects of trading in Essential Commodities such as food grains, edible oils, pulses kerosene, sugar, etc. The Central Government regularly monitors the action taken by the State Governments/UT administrations to implement the provisions of the essential Commodities Act, 1955. The items declared as essential commodities under the Essential Commodities Act, 1955 are reviewed from time to time in the light of liberalized economic policies in consultation with the ministries/ departments administering the essential commodities. EFFECTIVENESS OF THE ACT: Over the three years 2006-2008, State and Union Territory Governments prosecuted 14,541 persons under the provisions of EC Act, 1955 and secured conviction in 2,310 cases. In 2009 as on 31 August, 2533 persons had been prosecuted and 37 convicted. But, doubts have been raised about effectiveness of the Act time and again. STUDY OF ESSENTIAL COMMODITIES ACT RELEVANT TO DRUGS PRICE CONTROL ORDER
PHARMD GURU Page 2 Recently, Parliament's estimates committee asked the government to come out expeditiously with a new legislation for controlling the retail prices of essential commodities such as rice, wheat, pulses, edible oils, sugar, milk and vegetables. OBJECTIVES: The Essential Commodities Act, 1955 was enacted to ensure the easy availability of essential commodities to consumers and to protect them from exploitation by unscrupulous traders. Under the Essential Commodities Act, the government has powers to declare a commodity as an essential commodity. The essential commodities act gives powers to control production, supply, distribution, etc. of commodities for maintaining or increasing supplies and for securing their equitable distribution and availability at fair prices. ESSENTIAL COMMODITIES ACT, 1980: In order to prevent unethical trade practices like hoarding and black-marketing, etc. the Prevention of Black-marketing of Supplies of Essential Commodities, Act, 1980 is being implemented by the State Governments to detain persons whose activities are found to be prejudicial to the maintenance of supplies of commodities essential to the community. THE ESSENTIAL COMMODITIES ACT, 1955: An act to provide, in the interest of the general public, for the control of the production, supply and distribution of, and trade and commerce, in certain commodities. DEFINITIONS: 1. ESSENTIAL COMMODITY: An essential commodity is a generic term and has not been defined under the Act. 'Essential Commodity' means any of the following classes of commodities (List of essential commodities): 1) Cattle fodder, including oilcakes and other concentrates. 2) Coal including coke and other derivatives. 3) Component parts and accessories of automobiles.
PHARMD GURU Page 3 4) Cotton and woolen textiles. 4) (a) Drugs. 5) Foodstuffs, including edible oilseeds and oils. 6) Iron and steel, including manufactured products of iron and steel. 7) Paper, including newsprint, paperboard and straw board. 8) Petroleum and petroleum products. 9) Raw cotton, whether ginned or unginned, and cotton seed. 10) Raw jute. 11) Any other class of commodity which the Central Government may, by notified order, declare to be an essential commodity for the purposes of this Act. Jute textiles. Fertilizer, whether inorganic, organic or mixed. Yam made wholly from cotton. Seeds of food-crops and seeds of fruits and vegetables. Seeds of cattle fodder and jute seeds. 2. FOOD-CROPS: Food-crops include crops of sugar cane. 3. NOTIFIED ORDER: Notified Order means an order notified in the Official Gazette. 4. ORDER: Order includes a direction issued there under. 5. STATE GOVERNMENT: State Government, in relation to a Union Territory, means the administrator thereof. 6. SUGAR: Sugar means: Any form of sugar containing more than ninety per cent of sucrose, including sugar candy. Khandsari sugar or bura sugar or crushed sugar or any sugar in crystalline or powdered form. Sugar in process in vacuum pan sugar factory or raw sugar produced therein.
PHARMD GURU Page 4 7. COMMODITY: Commodity means a physical substance, such as food, grains, and metals, which is interchangeable with another product of the same type, and which investors buy or sell, usually through futures contracts. The price of the commodity is subject to supply and demand. Risk is actually the reason exchange trading of the basic agricultural products began. For example, a farmer risks the cost of producing a product ready for market at sometime in the future because he does not know what the selling price will be. More generally, a product which trades on a commodity exchange, this would also include foreign currencies and financial instruments. 8. COLLECTOR: Collector includes an Additional Collector and such other officer, not below the rank of sub-divisional officer, as may be authorized by the collector to perform the functions and exercise the powers of the collector under this act. CONTROL OF PRODUCTION, SUPPLY AND DISTRIBUTION OF ESSENTIAL COMMODITIES: Powers to control production, supply, distribution of essential commodities under Section 3: 1. If the Central Government may, for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations, provide for regulating, or prohibiting the production supply and distribution thereof and trade and commerce therein. 2. Without prejudice to the generality of the powers conferred by above sub-section, an order made there under may provide: a) For regulating by licenses, permits or otherwise the production or manufacture of any essential commodity. b) For bringing under cultivation any waste or arable land, whether appurtenant to a building or not, for the growing thereon of food-crops generally or of specified food-crops, and for otherwise maintaining or increasing the cultivation of food-crops generally, or of specified food- crops.