Government control over distribution and price of essential commodities is an important feature of a shortage economy. Production serves no purpose if the goods produced are not delivered to the final consumer at the right time in the right quantity and at the right price.
The existing private sector trade channels in India cannot be wholly relied upon due to their mal-practices and their general tendency to exploit the scarcity situation. Adulteration, hoarding, cornering, profiteering, black marketing and other anti-social and unethical practices make people cry for public distribution system.
Rationing of food grains was introduced during the Second World War period. It was withdrawn after the Independence but it was again introduced on a statutory basis in 1954. The basic legal frame for commodity control is provided by the Essential Commodities Act, 1955.
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ADVERTISEMENTS:
This Act provides, in the interest of the general public, for government control over the production, supply and distribution of essential commodities which are listed. These commodities fall into three classes—(a) food items, (b) raw materials for industries and (c) products of the centrally-controlled industries.
The Central Government is empowered to declare any commodity as an essential commodity for the purpose of the Act.
The Government has now listed over 60 commodities as essential commodities. For the purpose of this Act, essential commodity means any of the following classes of commodities:
ADVERTISEMENTS:
(i) Cattle fodder including oil cakes, (ii) Coal including coke and other derivatives, (iii) Component parts of automobiles, (iv) Cotton and woolen textiles, (v) Drugs, (vi) Foodstuffs including edible oils, (vii) Iron and steel, (viii) Paper and newsprint, (ix) Petroleum and petroleum products, (x) Raw cotton, (xi) Raw jute, (xii) Any other class of commodity which the Central Government may declare to be an essential commodity for the purpose of this Act.