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Barnala promises to expand futures markets

The government will introduce a bill to amend the Forward Contracts (Regulation) Act, 1952, in the next session of Parliament to strengthen the mechanism of futures trading, Minister for Food and Consumer Affairs Surjit Singh Barnala told a workshop on commodity futures markets in New Delhi yesterday.

The minister said the Centre had recognised the need to strengthen commodity markets and set up an expert committee headed by Prof K N Kabra in June 1993 to study the matter.

The committee's report, recommending introduction of futures trading in a number of commodities, establishment of an international futures exchange for trading in pepper and castor oil, and strengthening of commodities exchanges and the Forward Market Commission with amendments to the Forward Contracts (Regulation) Act, 1952, is being considered by the government. Most of the suggestions have either been or are being implemented, he added.

Barnala's speech was read out in his absence.

The minister said commodity exchanges in India had to improve their performance and make their working transparent, besides earning the confidence of customers. He urged big commodity traders to make greater use of the commodity futures markets.

Speaking on the occasion, Satyapal Singh Yadav, minister of state for food and consumer affairs, stressed the need to formulate rules and regulations to monitor commodity exchanges. As the futures markets are expanding, systems and procedures have to be strengthened to provide efficient service to traders and advance price signals to farmers, he said.

N N Mookerjee, secretary, department of consumer affairs, said the government was committed to reviving futures trading and strengthening commodity exchanges and the regulatory agency for them, the Forward Markets Commission. The list of commodities under futures trading has doubled in less than three years and the finance ministry has agreed to dollar-denominated contracts for the international castor oil exchange coming up in Bombay, he said.

In this context, he said it is equally important to revamp the Forward Markets Commission to empower it to handle more commodities with better skills.

UNI