Committee to monitor Tur under Essential Commodities Act

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    • Recently, the government announced the formation of a committee to monitor the stock of tur dal held by importers, mills, stockists, and traders in order to prevent hoarding and speculation.

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    • Furthermore, in order to assist easy and seamless imports, the government has eliminated the 10% charge on tur imports from non-LDC countries, as the levy imposes procedural impediments even for zero duty imports from LDC nations (LDCs).
    • India signed an MoU with Mozambique for import of 0.2 MT of tur annually for five years when the retail prices of tur skyrocketed to Rs 200 a kg in 2016. This MoU was extended for another five years in September 2021.
    • On August 12, last year, the government issued an advise to state governments and union territories under the Essential Commodities Act, 1955, requiring stock disclosure for tur dal.
    • Tur is a long-duration (180 days) pulses variety that is grown in rainfed conditions. It is grown in many states of India including Karnataka, Maharashtra, Uttar Pradesh etc. India meets about 10-12% of its domestic consumption through imports. 

    What is the Essential Commodities Act, 1955?

    • The Essential Commodities Act 1955 was introduced to address the problem of food scarcity during that period in India. The act was also enacted to stop the hoarding and black marketing of food items.
    • To feed its population, India was dependent on imports and assistance from other countries including the import of Wheat from the US.

    What are Essential Commodities?

    • Essential commodities are not specifically defined in the Essential Commodities Act, 1955, but Section 2(A) of the act underlines that an “essential commodity” means a commodity mentioned in the Schedule of the Act.
    • The Union government derives its power to add or remove a commodity specified in the schedule from this act. If necessary, the Central Government in consultation with state governments can notify an item as essential.
    • Face masks and sanitisers were added to the list on March 13, 2020 in the wake of the COVID-19 outbreak.
    • The government can control the production, supply, and distribution of the declared essential commodity and can also impose a stock limit.

    Withdrawal of the Essential Commodities (Amendment) Act 2020

    • In 2020, the Essential Commodities (Amendment) was passed and brought some changes to allow the government to remove some commodities specified as ‘essential’. It is argued that there are no special circumstances like war, famine, natural calamities, or extraordinary price rises, and thus they can be removed from the list.
    • However, the act was repealed by the Centre following massive protests by farmers in many parts of India. 

    Issues Related to Essential Commodities Act 1955

    • The Essential Commodities Act has no such punishment concerning black marketing or hoarding. 
    • The Economic Survey 2019-20 highlighted that government intervention under the ECA 1955 often distorted agricultural trade while being totally ineffective in curbing inflation. Such intervention does enable opportunities for rent-seeking and harassment.

    Source: FE