Essential Commodities Act: When and why did Centre invoke it last?
GS3Economy · S&T · Environment · Security· Fiscal policy, budget & taxation (GST)· Prelims + Mains·
Why in news
The Indian government invoked the Essential Commodities Act (ESA) of 1955 to mandate oil refining companies to prioritize domestic LPG production following the Israel-U.S. strikes on Iran.
Background
The government's order requires oil refining companies to maximize LPG production and prioritize domestic use while prohibiting its use for other petrochemical products. Previous invocations of the ESA included wheat stock limits in 2023 and sugar export caps in 2022.
Facts for Prelims
- Act / BillEssential Commodities Act (ESA) was enacted in 1955
- FactThe government mandated a prohibition on using LPG for other petrochemical products to prioritize domestic consumers
- FactWheat stock limits were imposed under the ESA in 2023
- FactSugar export caps were imposed under the ESA in 2022
For Mains
Q. Examine the role of the Essential Commodities Act in ensuring domestic supply security during global geopolitical crises and price volatility.
Dimensions to cover in your answer
- Market distortion: Balancing domestic price stability with the potential for reduced industrial output in the petrochemical sector
- Regulatory oversight: The shift from market-driven supply to state-mandated production quotas during energy crises
Keywords: Supply Security · Price Volatility · Market Intervention · Petrochemical Industry · Geopolitical Risk
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