Essential goods now by notification

The government has brought about major changes in the Essential Commodities Act, 1955, aimed at having powers to declare any item as an essential commodity for six months, even while pruning down the current list of essential items from 15 to 7.

The most significant amendment to the Act has been made through the inclusion of a new section empowering the central government to add or delete items from the list of essential commodities merely through a notification, valid for six months.

However, the government will need to justify its action on grounds like public interest or scarcity. The validity period of such notifications can be extended for another six months by citing the reasons to do so.

These statutory changes have been brought about through the Essential Commodities (amendment) Bill, 2005, which was passed by Rajya Sabha yesterday.

The categories of items deleted from the current list of essential commodities include iron, steel, and their manufactured products; automobile components and accessories; coal, coke, and other derivatives; cotton and woollen textiles; raw and ginned cotton, and cotton seed; paper, newsprint, paperboard and strawboard; and cattle fodder, oilcakes and other concentrates.

The categories of goods that have been retained on the list of essential items include drugs; food stuffs, oilseeds and oils; inorganic, organic, and mixed fertilisers; petroleum and petroleum products; hank yarn made wholly from cotton; raw jute and jute textiles; and seeds of food crops, fruit, vegetables, cattle fodders and jute.

The new bill also provides for retaining all the notifications, orders, and licences of permits issued under the old Act regarding commodities that continue to be on the list of essential items.

Analysts feel that these amendments are part of the government's attempt to keep the prices of essential items under check.

The government is sending a signal to markets that it can declare any item as essential under the purview of this law if it feels that its prices are shooting up due to hoarding or any other malpractice.

The chief ministers of Congress-ruled states had made suggestions to this effect at their meeting with party chief Sonia Gandhi, in the wake of the recent spurt in prices of items of mass consumption.

Though the implementation and enforcement of the Essential Commodities Act has been the responsibility of the state governments, they could not declare any new item as an essential commodity without the help of the Centre as it required changes in the law.

After the amendment of the Act, the Centre will be able to declare any item as essential on its own, without getting the prior approval of Parliament. The notification for this purpose will only have to be tabled in Parliament.