PM to chair think tank’s meet today
Government think tank NITI Aayog’s proposal to decontrol foodstuffs, including edible oils, oilseeds, fertilisers and seeds of agricultural products from the Essential Commodities Act (ECA), 1955 has irked several Ministries, including Agriculture, Petroleum, and Chemicals and Fertilisers. Prime Minister Narendra Modi is expected to discuss the issue at the NITI Aayog meeting on Saturday.
The ECA gives consumers protection against irrational spikes in prices of essential commodities. The Government invokes the Act to ensure adequate supplies by cracking down on hoarders and black-marketeers of such commodities.
According to officials, if control is removed, there would be no control or check over sale of spurious seeds, drugs, petroleum products and fertilisers or hoardings in the case of sudden price rise. On the other hand, NITI Aayog has sought classifications of controlled commodities and de-controlled commodities. The Aayog said that control can be placed only in case of war, for safe operation of defence forces, extraordinary instances related national security or in times of national disaster or inordinate price rises or inordinate supply deficiencies.
NITI Aayog says the Act is not in tune with present times. “It made sense at a time when the transport infrastructure across the country was poor and markets not integrated. So a production shock in one part of the country could lead to hoarding and black marketing. That’s not the case anymore. Shortages in one part of the country can be countered if there is ample supply somewhere else,” said officials.
“The periodic requirement or removal of licensing etc dissuades the trade from building any long term relationship, domestic or international and keeps the agricultural marketing chain opportunities in nature, unorganized in functioning and unplanned in its growth. The controls so placed also tend to impose unwarranted diktats on cultivation/production and disallows building the capacity to access new markets for apropos growth that the agricultural value system possesses. The eco system remains limited in its market range, market access and cannot even conceive or properly monetising its output,” the NITI Aayog said in its letter to the agriculture ministry.
“In the context of ongoing liberalization of Indian economy and in order to facilitate free flow of market forces, the rationalizing and progressive dismantling of the system of control and restriction in the agricultural economy is warranted for the overall benefit of both farmers and consumers,” it added.
The ECA was enacted way back in 1955. It has since been used by the Government to regulate the production, supply and distribution of a whole host of commodities it declares ‘essential’in order to make them available to consumers at fair prices.The list of items under the Act include drugs, fertilisers, pulses and edible oils, and petroleum and petroleum products. The Centre can include new commodities as and when the need arises and take them off the list once the situation improves.
