Essential Commodities Act, 1955

The Essential Commodities Act, 1955 was enacted to ensure easy availability of essential commodities to the consumers and to protect them from exploitation by unscrupulous traders. The Act provides for regulation and control of production, distribution and pricing of commodities, which are declared as essential for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. Most of the powers under the Act have been delegated to the State Governments.

The list of commodities declared as "essential" is reviewed from time to time in the light of changes in the economic situation and particularly with regard to their production, demand, and supply. From 15 February 2002, the Government removed 11 classes of commodities in full and one in part from the list of essential commodities declared earlier. In order to accelerate economic growth and to benefit consumers, two more commodities have been deleted from the list from 31 March 2004. At present the list of essential commodities contains 16 items.

In the context of liberalisation of Indian economy, it was decided that the Essential Commodities Act, 1944 may continue as an umbrella legislation for the Centre and the States to use when warranted allowing, however, a progressive dismantling of the control and restrictions. Accordingly, the Central Government issued the Removal of Licensing requirements, Stock limits and Movement Restrictions on Specified Foodstuffs Order, 2002 on 15 February 2002 under the Essential Commodities Act, 1955 allowing dealers to freely buy, stock, sell, transport, distribute, dispose, etc., any quantity in respect of wheat, paddy/rice, coarse grains, sugar, edible oilseeds and edible oils without requiring any license or permit therefore under any order issued under the Act.

Similar restrictions in respect of a few more items of foodstuffs viz., pulses, gur, wheat products (namely, maida, rava, suji, atta, resultant atta and bran) and hydrogenated vegetable oil or vanaspati have also been removed by notification/order dated 16 June 2003. Further, through this notification the said Central Order of 15 February 2002 has been amended to amplify the definition of ‘‘dealer’’ to include producer, manufacturer, importer and exporter. However, the Order has been amended to the extent that the rice levy orders have been retained to ensure price support to the farmer, while also ensuring adequate availability of rice at the disposal of the FCI/State Government agencies for operating the PDS/Welfare Schemes. Similarly, producer, manufacturer, importer and exporter of sugar have been excluded from the purview of the aforesaid Order as to facilitate issue of direction regarding stocks, storage, etc., of sugar particularly in the context of the prevalence of release mechanism/levy sugar quota and also to provide minimum support price to sugar cane growers.

Prevention of black marketing and Maintenance of Supplies of Essential Commodities Act, 1980

The Prevention of black marketing and Maintenance of Supplies of Essential Commodities Act, 1980 was enacted to provide for detention in certain cases for the purposes of prevention of black marketing and maintenance of supplies of commodities essential to the community and for matters connected therewith. The Act empowers the Central and State/UT Governments to detain persons whose activities are found to be prejudicial to the maintenance of supplies of commodities essential to the community. Detention orders were made in 112 cases by the State Governments during the year 2003. The Central Government and the State Governments also have the power to modify or revoke the detention orders. The representations made by or on behalf of the persons ordered for detention are considered and decided by the Central Government. Ninety five such representations were considered and decided during the year 2003.

Consumer Cooperatives

The consumer cooperative structure in the country has four tiers, with the National Cooperative Consumers Federation of India Limited (NCCF) at the national level. Thirty State Cooperative Consumers Organisations are affiliated to the NCCF. At the Central/Wholesale level, there are 800 Consumer Cooperative Stores. At the primary level, there are 25,759 primary stores. In the rural areas, there are about 44,418-village level Primary Agricultural Credit Societies and Marketing Societies undertaking the distribution of consumer goods along with their normal business. In the urban and semi-urban areas the consumer cooperative societies are operating about 37,226 retail outlets to meet the requirements of the consumers. The NCCF besides undertaking distribution of consumer articles, also has a Consultancy and Promotional Cell for strengthening consumer cooperative societies engaged in retailing activities. The NCCF with its Head Office at New Delhi has 32 branches/sub-branches located in various parts of the country. The sales turnover achieved by the NCCF during the year 2003-04 was Rs 626.11 crore as against the sales turnover of Rs 674.06 crore last year. It has earned a net profit of Rs 8.31 crore as against the profit of Rs 4.19 crore achieved during the previous year. The accumulated losses of the NCCF in 2003-04 were Rs 16.92 crore.

The government with the help of NCCF, launched the scheme called Sarvpriya in July 2000. The scheme envisages distribution of eleven selected commodities of daily use to the consumers through the existing PDS Retail Outlets and the Retail Outlets of the State Consumers' Cooperative Federations, State Civil Supplies Corporations and the Consumer Cooperative Societies in the States. The Scheme is voluntary involving no subsidy.