Non-essential law

The Bill to amend the Essential Commodities Act (ECA), introduced in the Rajya Sabha shortly before the conclusion of the winter session, reflects a very half-hearted bid to tone down the provisions of this outdated and retrograde piece of legislation. As such, the Bill is unlikely to adequately serve the objective of creating a free and competitive environment for the growth of agriculture, industry, trade and services. The Bill, while seeking to remove from the list of essential commodities all the 11 items mentioned under Section 2(a) of the ECA, opts for retaining seven categories of goods recommended by the ministries concerned. This extraordinary list includes commodities like raw jute and jute textiles; cotton hank yarn; foodstuffs, including edible oilseeds and oils; fertilisers; drugs; petroleum products; and seeds of vegetables, fruits, food and fodder crops, and jute. Such an extensive list of items is sought to be specified in a new Schedule to the Act, although items like jute goods, cotton yarn and edible oils cannot, by any stretch of imagination, be deemed so essential that a statutory measure is necessary to control and regulate their production, stocking, transportation and trade. There is little reason even for including vegetables and fruits in this list, especially since a politically sensitive item like onion was taken out of the purview of the law in November 2004.

What is worse, the government retains the powers to add more items to this Schedule. The only silver lining is that the powers remain only with the Centre (and not with the state governments, as earlier) and with the easy-to-meet condition that it would specify in Parliament the reasons for doing so. Going by the spirit of this proviso, the government should spell out at this stage itself the logic for retaining many of the listed items in the new schedule, and indeed the very logic of adding such a schedule to the law. It is also worth recalling that a similar statute, meant to supplement the ECA""the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980""still exists on the statute books. Also remaining in force are several control orders, such as the Drug Price (Control) Order and the mandatory use of jute bags for packing foodgrains and sugar.

The ECA has undergone several amendments after it was first enacted in 1955, in circumstances wholly different from those obtaining now. Most of the initial changes to the law aimed at making its provisions more stringent and hostile to trade. It was long after the beginning of economic liberalisation that the task was addressed of pruning the list of essential items and liberalising some of the draconian provisions of the law, notably the sweeping powers given to the enforcement agencies. Many of the needless controls and curbs and licensing requirements have also gradually been done away with, generating hopes that the law would some day be scrapped. The proposed amendments now before Parliament have blighted these hopes.

Indeed, considering the liberalisation of the import/export regime and the growing competition in the domestic and global bazaar, measures like the ECA are out of place and counter-productive. The government would, therefore, do well to revisit the draft of the EC (amendment) Bill, 2005, and reduce its scope drastically. The much better course, of course, would be to altogether scrap the ECA as well as its supplementary legislation and control orders.