Constitution (Third Amendment) Act, 1954

The Constitution (Third Amendment) Act, 1954 was enacted to modify the Seventh Schedule of the Indian Constitution, particularly Entry 33 of the Concurrent List (List III). This amendment expanded the legislative powers of both the Union and the States over the trade, commerce, production, supply, and distribution of certain essential commodities. It marked a significant development in the constitutional framework concerning economic planning, agricultural regulation, and the control of vital resources.
The Act was passed by the Lok Sabha on 23 September 1954, by the Rajya Sabha on 28 September 1954, and received Presidential assent from Dr. Rajendra Prasad on 22 February 1955, coming into force on the same date.

Background and Constitutional Context

The Seventh Schedule of the Constitution divides legislative subjects between the Union List, the State List, and the Concurrent List. Entry 33 of the Concurrent List, prior to this amendment, granted Parliament and State Legislatures concurrent powers to legislate on trade and commerce in the products of industries under Union control.
After the Constitution came into effect in 1950, Article 369 gave Parliament temporary powers—valid for five years—to legislate on certain essential commodities, including foodstuffs, cotton, and jute. This was considered necessary in the early years of independence to manage shortages, maintain fair distribution, and stabilise prices during post-war recovery and agrarian transition.
However, with the expiry of Article 369’s temporary provisions in 1955, the central government required a permanent constitutional mechanism to regulate these commodities. To ensure that both the Union and the States could legislate effectively on such vital matters, Entry 33 of the Concurrent List was revised through the Third Amendment.

Objectives of the Amendment

The amendment sought to:

• Extend the scope of Entry 33 beyond the products of controlled industries to include certain essential agricultural and raw materials.
• Provide a permanent constitutional basis for Parliament’s power to legislate on essential commodities such as foodstuffs, cattle fodder, raw cotton, and raw jute.
• Ensure continuity in the government’s ability to control and regulate production, supply, and distribution after the expiry of Article 369.

The Statement of Objects and Reasons, introduced by T. T. Krishnamachari, the then Minister of Commerce and Industry, clarified that since Parliament’s temporary powers under Article 369 were nearing expiry, it was “not considered advisable that after Article 369 lapsed there should be no control over the production, supply and distribution of some of these essential commodities.” Hence, Entry 33 was to be expanded accordingly.

Provisions Introduced by the Amendment

The Third Amendment substituted the existing Entry 33 in the Concurrent List of the Seventh Schedule with a broader provision. The new entry authorised legislation concerning:
“Trade and commerce in, and the production, supply and distribution of—(a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;(b) foodstuffs, including edible oil seeds and oils;(c) cattle fodder, including oilcakes and other concentrates;(d) raw cotton, whether ginned or unginned, and cotton seeds; and(e) raw jute.”
This widened the scope of legislative competence by adding commodities of critical economic importance—primarily agricultural goods and raw materials.

Legislative Process and Enactment

The Constitution (Third Amendment) Bill, 1954 (Bill No. 40 of 1954) was introduced in the Lok Sabha on 6 September 1954 by T. T. Krishnamachari. The Bill sought to ensure that both the Union and States could continue regulating essential commodities, especially after the expiry of Article 369.
A motion to refer the Bill to a Joint Committee was moved on 10 September 1954 and adopted by the Lok Sabha on 13 September 1954. The Rajya Sabha concurred with this motion on 16 September 1954, and the Joint Committee presented its report on 20 September 1954.
The Lok Sabha passed the Bill on 23 September 1954, followed by the Rajya Sabha on 28 September 1954. As the amendment affected the distribution of legislative powers between the Union and the States, it required ratification by at least half of the State Legislatures under Article 368. After obtaining ratification, the Bill received Presidential assent on 22 February 1955 and was published in The Gazette of India the next day.

State Ratifications

The amendment was ratified by more than half of the State Legislatures before being presented for Presidential assent. The States that approved the amendment included:

• Rajasthan
• Punjab
• Patiala and East Punjab States Union (PEPSU)
• Saurashtra
• Madhya Pradesh
• Madras
• Bihar
• West Bengal

This ratification process highlighted the cooperative nature of constitutional amendments involving federal distribution of legislative powers.

Economic and Legislative Implications

The Third Amendment was a key step towards strengthening India’s mixed economic framework during the early years of planning. It allowed the Central and State Governments to enact laws regulating essential commodities to prevent exploitation, control prices, and ensure equitable distribution during periods of scarcity.
Key implications included:

• Strengthening of the Essential Commodities Act: The amendment enabled Parliament to enact or extend laws like the Essential Commodities Act, 1955, which continues to serve as a major legal instrument for regulating trade in vital goods.
• Enhanced coordination between Union and States: By placing essential commodities in the Concurrent List, both levels of government could legislate simultaneously, ensuring flexibility in economic management.
• Support to agricultural and textile sectors: The inclusion of foodstuffs, raw cotton, and raw jute recognised their strategic role in India’s economy, particularly in relation to food security and industrial inputs.

Significance in Constitutional Development

The Third Amendment reflected India’s early post-independence efforts to build a self-reliant and controlled economy under the framework of a federal constitution. It balanced national economic policy objectives with the constitutional distribution of legislative authority.
By moving key agricultural and raw material commodities into the Concurrent List, the amendment effectively created a shared jurisdictional domain that allowed for coordinated responses to shortages, price fluctuations, and market manipulation.
Furthermore, it served as an early example of the Constitution’s adaptive flexibility, allowing modification of economic governance structures in response to emerging national priorities.

Legacy

The Constitution (Third Amendment) Act, 1954 laid the groundwork for India’s long-term policy of regulating essential commodities and ensuring food security. It provided constitutional legitimacy to central legislation that shaped India’s agricultural, commercial, and industrial regulation in subsequent decades.
It remains significant for establishing a clear legal basis for the Essential Commodities Act, 1955, and subsequent frameworks that govern pricing, storage, and distribution of key goods. By reaffirming the constitutional balance between Union control and State participation, the amendment ensured that India’s economic governance evolved in harmony with federal principles.
Ultimately, the Third Amendment symbolised a decisive move towards aligning constitutional provisions with economic planning and national development, while safeguarding the cooperative federal spirit of the Indian polity.