[Answered] The ED and the police have different roles and powers under the law. Compare and contrast the powers of the ED and the police, especially in the context of the PMLA and the Indian Penal Code.

Introduction: Give a brief explanation about ED.

Body: Compare the powers of both the ED and State Police.

Conclusion: Way forward.

The history of ED goes back to May 1, 1956, when an ‘Enforcement Unit’ was formed in the Department of Economic Affairs, for handling Exchange Control Laws violations under the Foreign Exchange Regulation Act (FERA). Today it is a multi-dimensional organisation investigating economic offences under the Prevention of Money Laundering Act (PMLA), Fugitive Economic Offenders Act, Foreign Exchange Management Act, and FERA. Police force on the other hand are responsible for law enforcement in states and UT’s. The Police Act of 1861 established the principles of organization for police forces in India and continues to date with minor modifications.

Compare and contrast the powers of ED and state police:

  • Jurisdiction: ED is a specialized law enforcement agency that operates under the Department of Revenue, Ministry of Finance, Government of India. State police on the other hand functioned under the administrative control of the state government.
  • Function: ED’s primary mandate is the enforcement of economic laws and regulations, focusing on cases related to money laundering and foreign exchange violations under the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA). State police must maintain law and order, prevent and detect crimes, and ensure public safety. Police and Public Order are State subjects under the Seventh Schedule to the Constitution of India.
  • Investigation: The ED examines cases involving economic crimes, financial scams, money laundering, and foreign exchange infractions. Its main goal is to locate, identify, confiscate, and track down the proceeds of crime that are produced by the illicit activity. The State Police investigate a variety of crimes, including but not limited to theft, robbery, assault, murder, kidnapping, drug trafficking, and other infractions of the Indian Penal Code (IPC) and applicable state legislation.
  • Registration of case: ED authorities begin with search procedures and begin their investigation to gather materials and trace the “proceeds of crime” by issuing summonses, whereas the police are required to register a First Information Report (FIR) for a cognizable offense before investigating. The enforcement directorate cannot register a case on its own, it is required by agencies such as CBI or state police to register an offense based on which the ED Case Information Report is filed by the Enforcement Directorate. State police are authorised to start an investigation into a cognizable case on their own and they do not require any orders from the court to do so.
  • Admissibility of statement: The PMLA’s provisions practically make the ED far more powerful than the police as it is the only Act in the country where a statement recorded before an investigating officer is admissible in a court as evidence while any statement made by an accused to the police is inadmissible as evidence in court of law.


The focus of the government should be to strengthen the functioning of the ED by filling the vacancies in the ED and setting up separate buildings for detention and questioning. The focus of ED should be to improve its conviction rate rather than being used by politicians to target opposition leaders.

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