Undermining Markets: When Government Intervention Hurts More Than It Helps

• Government intervention, though well intended, often ends up undermining the ability of the markets to support wealth creation and leads to outcomes opposite to those intended.
• Four examples of anachronistic government interventions:

1. Essential Commodities Act (ECA), 1955:

• Frequent and unpredictable imposition of blanket stock limits on commodities under ECA distorts:
• The incentives for the creation of storage infrastructure by the private sector.
• Movement up the agricultural value chain.
• Development of national market for agricultural commodities.
• Imposition of stock limits on dal in 2006-Q3, sugar in 2009-Q1 and onions in September, 2019 spiked up the volatility of the retail and wholesale prices of onions.
• The Ministry of Consumer ....