The Essential Commodities Act, 1955 (ECA) is an Act of the Parliament of India, enacted to provide for the control of the production, supply, and distribution of, and trade and commerce in, certain commodities in the interest of the general public. The Act was created in 1955, receiving the President's assent on April 1, 1955, to address post-independence challenges like food scarcity, rampant hoarding, and artificial price inflation. It solved the problem of market exploitation by giving the government a legal tool to ensure the availability of essential goods, such as drugs, foodstuffs, and petroleum products, at fair prices.
The core mechanism of the ECA is Section 3, which grants the Central Government broad authority to issue control orders to regulate or prohibit the production, supply, and distribution of essential commodities. This power includes imposing stock limits to prevent hoarding and securing equitable distribution. The Act is connected to the broader Public Distribution System (PDS) and is administered by the Ministry of Consumer Affairs, Food and Public Distribution.
The Act was significantly changed by the Essential Commodities (Amendment) Act, 2020, which came into force on June 5, 2020. The amendment inserted sub-section (1A) into Section 3, which deregulated agricultural foodstuffs like cereals, pulses, potato, onions, edible oilseeds, and oils. These commodities can now only be regulated under "extraordinary circumstances," such as war, famine, extraordinary price rise, or a natural calamity of grave nature. Furthermore, stock limits on agricultural produce can only be imposed if the retail price increases by 100% for horticultural produce or 50% for non-perishable agricultural foodstuffs. The government's emergency powers and its ability to regulate non-agricultural essential commodities remained, as did the exemption for the PDS from the new stock limit regulations.