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Essential Commodities Act, 1955

Paper : General Studies 2

Why in the news?

The NITI Aayog meeting today will consider the scrapping of the Essential Commodities Act, 1955 and Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities (PBMSEC) Act, 1980 as it is an impediment in the free movement of commodities.

 

What is the Essential Commodities Act, 1955?

  • The ECA was enacted way back in 1955. It has since been used by the Government to regulate the production, supply and distribution of a whole host of commodities it declares ‘essential’ in order to make them available to consumers at fair prices.
  • The list of items under the Act include drugs, fertilisers, pulses and edible oils, and petroleum and petroleum products. The Centre can include new commodities as and when the need arises, and take them off the list once the situation improves.
  • If the Centre finds that a certain commodity is in short supply and its price is spiking, it can notify stock-holding limits on it for a specified period. The States act on this notification to specify limits and take steps to ensure that these are adhered to. Anybody trading or dealing in a commodity , be it wholesalers, retailers or even importers are prevented from stockpiling it beyond a certain quantity.
  • A State can, however, choose not to impose any restrictions. But once it does, traders have to immediately sell into the market any stocks held beyond the mandated quantity. This improves supplies and brings down prices. As not all shopkeepers and traders comply, State agencies conduct raids to get everyone to toe the line and the errant are punished. The excess stocks are auctioned or sold through fair price shops.
  • The ECA gives consumers protection against irrational spikes in prices of essential commodities. The Government has invoked the Act umpteen times to ensure adequate supplies.. It cracks down on hoarders and black-marketeers of such commodities.

 

What are suggestions that have been given by the NITI Aayog?

  • Scrapping of the Act has been the first suggestion in the proposal submitted by the NITI Aayog.
  • Alternatively, the proposal has suggested classifying commodities under the EC Act into two categories: Priority One — drugs, petroleum/petroleum products, and fertilizers; and Priority Two — foodstuffs and seeds of agricultural produce. The first category would continue to witness some controls, the second should be “decontrolled” with a caveat that controls “may” be imposed in “exceptional circumstances” like war, severe natural calamities or steep fall in production (over 10 per cent dip in a year) or a sharp rise in prices (100 per cent or more over the previous year).
  • Additionally, the proposal seeks the opinion of the Governing Council to do away with the imprisonment provision and instead adopt punishments inclined towards monetary penalties for any contravention.

 

Ebola Virus

Paper : General Studies 2

Why in the news?

The World Health Organization may declare Ebola to be a global emergency over the Ebola epidemic in Democratic Republic of Congo that has now spread to Uganda.

This epidemic is expected to be the second worst outbreak worldwide after the Ebola outbreak of 2014-16 in West Africa. The current outbreak has led to 1,405 deaths and 2,084 cases.

What is Ebola?

  • Ebola virus disease (EVD), formerly known as Ebola haemorrhagic fever, is a rare but severe, often fatal illness in humans.
  • The virus is transmitted to people from wild animals and spreads in the human population through human-to-human transmission.
  • The average EVD case fatality rate is around 50%. Case fatality rates have varied from 25% to 90% in past outbreaks.
  • Community engagement is key to successfully controlling outbreaks.
  • Good outbreak control relies on applying a package of interventions, namely case management, infection prevention and control practices, surveillance and contact tracing, a good laboratory service, safe and dignified burials and social mobilisation.
  • Vaccines to protect against Ebola are under development and have been used to help control the spread of Ebola outbreaks in Guinea (called rVSV-ZEBOV) and in the Democratic Republic of the Congo (DRC).
  • Early supportive care with rehydration, symptomatic treatment improves survival. There is no licensed treatment proven to neutralize the virus but a range of blood, immunological and drug therapies are under development.

 

The Ebola virus causes an acute, serious illness which is often fatal if untreated. EVD first appeared in 1976 in 2 simultaneous outbreaks, one in what is now Nzara, South Sudan, and the other in Yambuku, DRC. The latter occurred in a village near the Ebola River, from which the disease takes its name.

 

India – US Trade Tensions

Paper : General Studies 3

Why in the news?

  • India’s retaliatory tariffs on 29 items imported from the US will kick in on June 16, a year since the country had decided to do so.
  • In March 2018, US imposed 25% tariff on steel and a 10% import duty on aluminium. In June 2019, US withdrew export incentives under its Generalised System of Preferences programme, India was the largest beneficiary of the programme.
  • These measures are expected to affect India’s trade balance with the US that has been positive for India in the past.

 

For more on Generalised System of Preferences, refer to Enhancer May 2019

 

Trade Deficit widens to $15.4 billion

Paper : General Studies 3

Why in the news?

  • India’s trade deficit expanded to a six-month high of $15.4 billion in May, with import growth outpacing export growth following a 37% jump in gold imports.
  • According to data released by the commerce ministry on Friday, exports grew 3.93% in May, while imports rose 4.31%. Exports have been in low single digits in six out of the last seven months, barring March when it grew in double digits.
  • Rising crude oil prices, amid sanctions on Iranian oil imports, could further increase imports and put pressure on India’s current account deficit.

 

What is trade deficit?

It is the amount by which the cost of a country’s imports exceeds the value of its exports i.e.

Trade deficit = Value of Imports – Value of Exports

When a country has an excess of exports over imports it is called a trade surplus.