Why is it in the news?
- Recently, the Stock limits for wheat have been reduced for traders, wholesalers, retailers, big chain retailers, and processors in all States and Union Territories.
- The revised stock limit is 2,000 Metric Tonnes (MT), down from the previous limit of 3,000 MT.
- The move is a response to the artificial scarcity created by some individuals, leading to an increase in wheat prices.
- Violators of stock limits may face punitive action under the Essential Commodities Act, 1955.
Essential Commodities Act 1955
- There is no specific definition of essential commodities in ECA 1955.
- Section 2(A) of the Actstates that an “essential commodity” means a commodity specified in the Schedule of the Act.
- To prevent hoarding and black marketing of foodstuffs,the Essential Commodities Act was enacted in 1955.
- It curbs inflationby allowing the Centre to enable control by state governments of trade in a wide variety of commodities.
- Centre’s Role:
- The Act gives powers to the central government to add or remove a commodity in the Schedule.
- The Centre, if it is satisfied that it is necessary to do so in the public interest, can notify an item as essential, in consultation with state governments.
- By declaring a commodity as essential, the government can control the production, supply, and distribution of that commodity, and impose a stock limit.