The Essential Commodities Act, 1955
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FINAL REPORT VOLUME- I- MAIN REPORT STUDY ON IMPLEMENTATION OF ESSENTIAL COMMODITIES ACT, 1955 AND THE PREVENTION OF BLACK MARKETING & MAINTENANCE OF SUPPLIES OF ESSENTIAL COMMODITIES ACT, 1980 SUBMITTED TO DEPARTMENT OF CONSUMER AFFAIRS MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION, GOVERNMENT OF INDIA BY SANTEK CONSULTANTS PRIVATE LIMITED DELHI-110091 ([email protected]) SANTEK CONSULTANTS PRIVATE LIMITED DELHI PREFACE The Essential Commodities Act, 1955 is an act of Parliament of India which was established to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or black marketing would affect the normal life of the people. This Act was enacted to ensure the easy availability of essential commodities to consumers and to protect them from exploitation by unscrupulous traders. The Act provides for the regulation and control of production, distribution and pricing of commodities which are declared as essential for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. Thus this Act empowers the Central Government to regulate production, supply, distribution, storage, transport, etc.; and control price of commodities which have been declared under the Act, as essential are provided for those who commit offences under the Act for maintaining or increasing supplies; securing their equitable distribution and securing availability at fair prices. The Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 (PBM Act) is being implemented through the State Governments/UT Administrations for prevention of illegal and unethical trade practices of black marketing of essential commodities. It covers all the essential commodities. The Act empowers the Central and State Government authorities as prescribed in the Act to detain persons whose activities are found to be prejudicial to the maintenance of supplies of the commodities essential to the community in general including targeted groups under PDS. As per reports received from the State Governments/UTs, detention orders were issued against 214 persons under the Act during 01.01.2013 to 31.12.2013. During 2010 to 2013 a total of 920 detention orders were issued by only 6 State Governments. From the remaining States/UTs, the information is not available. The Central Government and the State Governments also have powers to revoke the detention orders. The Central Government has been regularly requesting the States/UTs to implement the Act effectively to contain black marketing In the last couple of months a lot of volatility has been seen in the prices of some of the essential commodities, more specifically the foodstuff items and there has been a sharp rise (in some case even more than threefold) in prices at which they are available to both the rural and urban consumers. The poor and lower income group as well as the middle income group has been the most affected due to this crisis. All this resulted in a big furore, hue and cry regarding the efforts being made to control prices, inflation rate, etc., etc. There have been numerous allegations as well as instances of malpractices such as black-marketing, hoarding, profiteering being responsible for sudden increase in (i) Study on Implementation of Essential Commodities Act 1955 and the Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980, for Department of Consumer Affairs, GoI SANTEK CONSULTANTS PRIVATE LIMITED DELHI prices. The two most important Acts which regulate and control the supply of Essential Commodities are as cited in previous paragraphs. Hence, it was felt necessary by the Government of India to review these two acts so as to assess the need of any changes required to be made in these acts, so as to sharpen their tooth for controlling price-rise as well as malpractices and this study was commissioned to M/s Santek Consultants Private Limited, Delhi. The consultants were assigned the task to ‘Study the Implementation of Essential Commodities Act, 1955 and Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980’ with a key objective to assess the progress in administration and implementation of these two acts, enumerate the bottlenecks / failures in implementation and give suggestions / recommendations. With this background and the complexities of roles of various Departments at the grassroot level, M/s Santek Consultants Private Limited conducted the study very diligently in order to encompass the various stakeholders involved in the implementation and execution of these Acts, giving due emphasis to its impact on the consumers including special categories namely BPL/ AAY/ APL/ SBPL/ JRC/ RCRC, etc. M/s Santek Consultants Private Limited, have also attempted to bring out various facets of the implementation of the Acts, enforcement mechanisms viz-a-viz the Acts/ Control orders enacted by the Central and State Governments of the four surveyed states, as well as, failures / bottlenecks in implementation or otherwise; based on which suggestions and recommendations have been provided for necessary changes / modifications in these two acts, to make them more effective and efficacious. The Consultants are grateful to all the senior officers of the Government of India, the State Governments and other stakeholders who have provided valuable inputs during interactions and cooperation in successful completion of this study. Needless to mention, that the time frame for this study was extremely tight and many constraints and impediments were faced in the field in collecting data. The consultants also faced a lot of skepticism and hesitance in being provided data by various authorities particularly in the State of Rajasthan. The Consultants plead forgiveness for any unintentional hurt caused to the sentiments of any individual or group due to this pressing assignment. Sanjay Jain Director (ii) Study on Implementation of Essential Commodities Act 1955 and the Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980, for Department of Consumer Affairs, GoI SANTEK CONSULTANTS PRIVATE LIMITED DELHI ACKNOWLEDGEMENT We are also grateful to the Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution, Government of India, for assigning this prestigious task of Undertaking the Study on Implementation of The Essential Commodities Act, 1955 and The Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 We are in particular grateful to the officials of the Ministry of Consumer Affairs, Food and Public Distribution, Government of India, namely Shri G Gurucharan (IAS), Additional Secretary, Shri Surender Singh, Deputy Secretary, Shri Pumchinkhup Guite, Under Secretary as well as all other officials of the Ministry who were actively involved in this assignment, for extending all cooperation and help during the conduct of this study. We are also grateful to all the Senior Level and the field level officials of the State Governments of Uttar Pradesh, Delhi, Haryana and Rajasthan and other stakeholders including the villagers with whom we had interacted in the assigned period of this work, to help arrive at the findings and conclusions, for this Report. Sanjay Jain Director (iii) Study on Implementation of Essential Commodities Act 1955 and the Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980, for Department of Consumer Affairs, GoI SANTEK CONSULTANTS PRIVATE LIMITED DELHI ABBREVIATIONS/ ACRONYMS AAY Antoyoday Anna Yojana AC Assistant Commissioner AFSO Assistant Food and Supply Officer APL Above Poverty Line BPL Below Poverty Line CBPL Central Below Poverty Line CS CID Civil Supplies Criminal Investigation Department (Tamil Nadu) DBC Double Gas Cylinder Booking Card DC Deputy Commissioner DDA Delhi Development Authority DFSC District Food And Supplies Controller DFSO District Food and Supply Officer DM District Magistrate DSO District Supply Officer EC Essential Commodities EI Enforcing Inspector EO Enforcing Officer FPS Fair Price Shop FSO Food & Supply Officer HH Household JRC Jhuggi Ration Card LPG Liquefied Petroleum Gas NFS National Food Security Act. OMCs Oil Marketing Companies OPH Other Priority Household PDS Public Distribution System PHH Priority Household PRIs Panchayati Raj Institutions (RCRC) Resettlement Colony Ration Card SBC Single Gas Cylinder Booking Card SBPL State Below Poverty Line SC Scheduled Caste ST Scheduled Tribe SDM Sub Divisional Magistrate SDO Sub- Divisional Officer (iv) Study on Implementation of Essential Commodities Act 1955 and the Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980, for Department of Consumer Affairs, GoI SANTEK CONSULTANTS PRIVATE LIMITED DELHI LIST OF CONTENTS VOLUME-I- MAIN REPORT Chapter Title Page No. No. Preface (i) Acknowledgement (iii) Abbreviations/ Acronyms (iv) I INTRODUCTION 1 II STUDY DESIGN AND METHODOLOGY 10 III STUDY FINDINGS 23 SECTION-I (ANALYSIS OF DATA OF SAMPLE SURVEY) 24 SECTION-II (STATE-WISE DETAILS OF MAIN 85 RELEVANT ACTS / CONTROL ORDERS) SECTION-III (DETAILS ON THE ENFORCEMENT 132 SYSTEM) SECTION-IV (STATE-WISE BOTTLENECKS / 151 FAILURES) Exhibit FLOW-DIAGRAM FOR PROCUREMENT AND 207 3.IV.1 DISTRIBUTION OF COMMODITIES SECTION-V (CASE STUDIES) 211 IV REVIEW OF MODELS IN NEIGHBOURING 222 COUNTRIES V CONCLUSIONS AND RECOMMENDATIONS 264 SUGGESTED SPECIFIC