THE GIST of Editorial for UPSC Exams : 16 March 2020 (Essential Commodities Act (Mint))

Essential Commodities Act (Mint)

Mains Paper 2:Polity
Prelims level:Essential Commodities Act
Mains level: Shortcomings of the Essential Commodities Act

Context:

• The ECA was enacted in 1955 to give government the power to regulate the production, supply anddistribution of a whole host of commodities it declares ‘essential’ in order to make them available toconsumers at fair prices.
• The list of items under the Act include drugs, fertilisers, pulses and edible oils, and petroleum andpetroleum products. The Centre can include new commodities as and when the need arises, and takethem off the list once the situation improves.
• If the Centre finds that a certain commodity is in short supply and its price is spiking, it can notifystock-holding limits on it for a specified period. The States act on this notification to specify limits andtake steps to ensure that these are adhered to.
• 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.

Shortcomings of the Act:

• However, the Act has created market distortions that have prevented the efficient development ofagricultural markets.
• Given that almost all crops are seasonal, ensuring round-the-clock supply requires adequate buildup of stocks during the season. So, it may not always be possible to differentiate between genuinestock build-up and speculative hoarding.
• Also, there can be genuine shortages .................................................

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Way forward:

• Although the ECA has novel intentions but the interventions that were apt in instances of severe marketfailures have lost their relevance in a transformed economy.
• Eliminating such instances of needlessgovernment intervention will enable competitive markets and thereby spur investments and economicgrowth.

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Prelims Questions:

Q.1)With reference to the Parliamentary Standing Committee on Human Resource Development (HRD) report on school education, consider the following statements:
1. Only 56% of schools have electricity, with the lowest rates in Manipur and Madhya Pradesh, where less than 20% have access to power.
2. Less than 57% of schools have playgrounds, including less than 30% of schools in Odisha and Jammu and Kashmir, according to the Unified District Information System for Education (UDISE) 2017-18 survey.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer:.................................................

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Mains Questions:
Q.1) The Economic Survey 2020 has severely criticized the Essential Commodities Act (ECA). Whatis the Essential Commodities Act? Highlight the problems associated with the Act.