Dozen Items Dropped From Essential Commodities List

Fulfilling its oft-repeated commitment to restrict the scope of the Essential Commodities Act (ECA) and liberalise the commodity trade, the government today formally pruned the list of mass-consumption goods covered under the Act from the existing 29 to 17.

Simultaneously, it has done away with the licensing of dealers and others trading in several items, including wheat, paddy, rice, coarse grains, sugar, edible oilseeds and edible oils. The restrictions on the storage and the movement of these items have also been lifted.

While the 12 items would be dropped from the list of essential commodities by rescinding the notifications which declared them as essential commodities, the movement and the storage curbs will be lifted through a Central Order to be issued under Section 3 of the ECA. The decision to this effect was taken by the Union Cabinet today.

 

The items to be removed from the essential commodities list include textiles machinery, silken textiles, textiles made from man-made cellulosic and non-cellulosic spun fibre and filament yarn, man-made cellulosic and non-cellulosic staple fibre, yarn made from wool, silk and cellulosic and non-cellulosic spun fibre, electric switches, plugs and sockets, lighting lamps, electric cables and wires, and household appliances like electric irons, heater, etc.

The Essential Commodities Act was passed in 1955 in the public interest for controlling the production, stocking, supply, distribution and trade of essential commodities. This gave the powers to the Central and the state governments to issue orders relating to the licensing of dealers and retailers of foodgrains, regulation of stock limits, restriction of movement of foodgrains and imposition of levy on compulsory purchase of foodgrains.

The list of the essential items has been modified several times through Central and state-level notifications and regulatory orders under the Act. In 1990, on the eve of the beginning of the economic reforms, the list comprised of 70 items and was gradually pruned to 31 by 1997.

However, the onion crisis of 1999 prompted the government to expand this list to 32 by including onion in it. Last year, three more items -- tea, coconut husk and coir fibre -- were removed from this list.

The items that continue to be part of the list of the essential goods include cotton and woollen textiles, cotton, cotton seed, cotton yarn, raw jute and jute textiles, etc. Section 2 (a) of the Act has not been altered. It pertains to cattle fodder, coal and its derivatives, automobiles components and accessories, drugs, edible oilseeds and oils, iron and steel, paper (including newsprint) and petroleum products.

The liberalisation of storage and movement of foodgrains, edible oilseeds and oils and sugar would make the entire country a single zone for trade in these items.

At present, though the Centre has lifted all curbs on the movement of these items, restrictions and controls are still in place in several states. This move is intended to help farmers in getting higher prices for their produce. It will also ensure better availability of these items all over the country, thereby stabilising the prices as well.

States like Andhra Pradesh, Tamil Nadu, Karnataka, Jammu & Kashmir and Madhya Pradesh have imposed statutory restrictions on the movements of rice and paddy outside the states to meet internal requirements. Andhra Pradesh has, however, kept the implementation of these curbs in abeyance since July 2000. Some other states impose informal restrictions on the movement of foodgrains outside the state during specific periods of the year.