Economic Survey

Essential Commodities Act (ECA), 1955

  • Economic Survey 2019-20 criticized government anachronistic intervention and amongst the prime example of it being ‘Essential Commodities Act (ECA), 1955’.
  • Essential Commodities Act was passed in 1955 to regulate the production, supply and distribution of a list of commodities it declares ‘essential’. This ensures that the commodities are available to consumer at a fair price.
  • As per the survey frequent and unpredictable imposition of blanket stock limits on commodities under ECA distorts:
      1. The incentives for the creation of storage infrastructure by the private sector.
      2. Movement up the agricultural value chain.
      3. Development of national market for agricultural commodities.
      4. The low conviction ....

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Indian Economy & Socio-economic Development