Commodity-markets regulator Forward Markets Commission expects the Parliamentary Standing Committee’s report on Forward Contracts Regulation Amendment (FCRA) Bill 2010 to be submitted on time for it to be taken up in the Budget session.
The Cabinet had cleared the Bill last September and it has been referred to the Parliamentary Standing Committee.
Speaking to the media, on the sidelines of the Future of Financial Markets 2011 Leadership Summit, Mr B.C. Khatua, Chairman, Forward Markets Commission, said ?the Committee had a meeting with the Commission on Friday and we are confident that it will submit its report before the prescribed three months deadline so that it can be tabled during the second half of the Budget session?.
Expressing confidence that FMC will be fourth time lucky, Mr Khatua said the Bill has undergone various changes since it was first introduced in 1998 with three standing committees submitting their reports.
The Government seems more convinced now that the futures trading in commodities were not stoking up inflation. However, Mr Khatua said, the Government had considered banning at least six commodities, but the intervention by FMC saved the day.
Hinting that competition in the commodity exchange space will intensify, Mr Khatua said there are five national exchanges currently in operation while one (Universal Commodity Exchange) is in the pipeline and another two (NBOT and Pramod Mittal-promoted Ispat Group have filed an application for launching an exchange) are in the process of filing their papers.
NO MARGIN HIKE
The Government has recently restricted the number of commodity exchanges to eight.
FMC has ruled out further margin hike in guargum futures contract to arrest hike in prices.
?Despite hiking margin to 28 per cent prices are still rising. So the demand is genuine and we do not see much speculation,? he said.
Prices of guargum has increased 25 per cent since October due to good demand from oil exploration companies which uses guargum as a lubricant.
?India caters to 80 per cent of the global demand. Instead of crying hoarse over the price rise, the country should take advantage of high prices in the global markets.?