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All you wanted to know about Essential Commodities Act

Parvatha Vardhini C | Updated on March 24, 2020 Published on March 24, 2020

Due to the Covid-19 outbreak, the Ministry of Consumer Affairs has brought hand sanitisers and masks (2-ply, 3-ply variety and N95) under the purview of the Essential Commodities Act (EC Act) until June 30.

 

What is it?

Under the EC Act of 1955, if the Central government thinks that it is necessary to maintain or increase supplies of any essential commodity or make it available at fair prices, it can regulate or prohibit the production, supply, distribution and sale of that commodity. Some of the essential commodities listed out in the schedule to this Act are foodstuffs including edible oils and oilseeds, drugs, fertilisers, petroleum and petroleum products. But the Centre has the power to add or remove any commodity in public interest from this list, and that’s what it has done with masks and hand sanitisers.

In the past, the EC Act was mostly invoked to control the price rise in food products. When the prices of any of these commodities rise, the government imposes stock-holding limits to prevent hoarding, confiscates the stocks of violators and imposes punishment.

Why is it important?

In recent years, there has been an argument that the EC Act was draconian and not suited for times when farmers face problems of plenty rather than scarcity. The Economic Survey 2019-20 argued that it hampered remunerative prices for farmers and discouraged investment in storage infrastructure.

But in the context of a crisis like the current one, the EC Act seems to serve a purpose. Bringing masks and sanitisers under the EC Act will enhance the availability of these products to the public, at fair prices. Producers have been urged to manufacture these up to full capacity over three shifts. The government can take action against hoarders, speculators and those involved in jacking up prices or black-marketing. Besides this, quota restrictions on raw material holdings can be relaxed. The MCA has asked all State governments to issue licences and permit hand-sanitiser makers to store ethanol and extra neutral alcohol (ENA) without any quota restrictions. The Indian Sugar Mills Association and All India Distilleries Association have been asked to ensure that ethanol and ENA are made easily available to producers. Reports indicate prices of ethanol and ENA can not be increased till June 30 and will need to be sold at the price levels as on March 5 this year.

Why should I care?

Tried buying a mask or a bottle of hand sanitiser in the recent past? Chances are that you may not have got one. Those who were lucky enough to get a mask would likely have paid much more than the normal cost. By placing them under the EC Act, the government has capped the prices of these items. Price of a 2-ply mask has been capped at ₹8 and that of 3-ply surgical mask can’t exceed ₹10. Cost of hand sanitisers can’t exceed ₹100 for a 200-ml pack. Responding to this directive, companies such as Godrej Consumer, ITC and Hindustan Unilever have slashed the prices of sanitisers.

Invoking the Act makes it harder for retailers to hoodwink customers. If they violate the norms, States can take action under the EC Act and the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodites Act (PBMMSEC Act). An offender under the EC Act may be punished with an imprisonment of up to seven years and/or fine; and under the PBMMSEC Act, they can be detained for maximum of six months.

If you are confronted with the non-availability of masks and sanitisers or find it being sold for higher prices, you can register your complaint with the National Consumer Helpline (NCH) number 1800-11-4000/online at www.consumerhelpline.gov.in or www.consumeraffairs.nic.in/ through the NCH/Consumer app.

Producers need not fret much about the cap on prices, as they partly benefit from lower input prices, with higher volumes making up for the lower price point to some extent.

The bottomline

In Mahatma Gandhi’s words, the world has enough for everyone’s need, but not everyone’s greed.

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Published on March 24, 2020
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