What is Essential Commodities Act that India invoked amid Iran war

The government on Thursday invoked the Essential Commodities Act, 1995 amid the ongoing Iran war that caused the closure of the Strait of Hormuz, leading to disruption in global oil and gas supply. The Centre has diverted the supply of natural gas and liquified natural gas (LNG) to priority areas.

Gas supply shortages have affected everyday life across Indian states, forcing crematoriums in Pune to shut operations, causing supply problems for restaurants in Bengaluru, and pushing up LPG cylinder prices for households.

Also read: Govt invokes Essential Commodities Act to ensure LPG supply, orders refineries to divert key streams

What is The Essential Commodities Act?

The Essential Commodities Act, 1005 acts as the government's tool to control of the production, supply and distribution of, and trade and commerce, in certain commodities.

'Essential Commodities', as listed in the Act, include the following:

1. drugs (For the purposes of this Schedule, “drugs” has the meaning assigned to it in clause (b) of section 3 of the Drugs and Cosmetics Act, 1940)
2. fertilizer, whether inorganic, organic or mixed
3. foodstuffs, including edible oilseeds and oils
4. hank yarn made wholly from cotton
5. petroleum and petroleum products (SC has held that natural gas and liquified natural gas come withinthe purview of petroleum and petroleum products)
6. raw jute HI jute textiles
7. (i) seeds of food-crops and seeds of fruits and vegetables, (ii) seeds of cattle fodder and (iii) jute seeds

What can the government do under the Essential Commodities Act?

The Act empowers the government to control production, supply, distribution, and trade and commerce of essential commodities if it feels the necessity to do so to maintain or increase supplies of any such item or for securing their equitable distribution and availability at fair prices.

To prevent hoarding and blackmarketing, authorities can control how much stock traders can hold, and regulate storage, transport and sale of these commodities

The government can also direct producers or traders to sell part or all of their stock to the government or authorised agencies. In certain cases, businesses dealing with essential commodities may be required to operate only with licences or permits issued by the government.

They can be required to maintain records and share data on stocks, production and trade. Under the Act, officials have the power to search premises, seize commodities, vehicles or documents, and even confiscate goods if rules are violated.