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.
• Impact:
  • By declaring a commodity as essential, the government can control the production, supply, and distribution of that commodity, and impose a stock limit.