Govt to curb malpractices in commodity bourses, says minister

New Delhi, June 8 (UNI) Government will not allow any kind of manipulation in the three national commodity exchanges as it wants the Forward Markets Commission (FMC) to curb the malpractices with sound margin system.

''The government is not against speculation but would not allow manipulation in the commodities trade,'' Union Minister of State for Food and Public Distribution Akhilesh Prasad Singh said here today.

The minister was addressing the annual commodities conference on 'Opportunities in the Booming Commodities Market', organised by the Associated Chamber of Commerce and Industry (ASSOCHAM).

He said with the establishment of sound margining system, strong and efficent surveillance mechanism, FMC and Exchanges would be able to curb these market manipulations.

Mr Singh said the volatile nature of the futures market at times is harmful to the end-users. ''It brings speculative elements in the whole process leading to distortion and manipulation of agricultural products and needs to be guarded against,'' he said.

The minister said the commodities futures market has been playing a significant role and therefore would have a larger role to contribute to country's GDP.

With the government aiming for a growth rate of 8 to 10 per cent in GDP in the coming years, it is important that the agricultural sector gets the right fillip to sustain this growth rate, he said.

India's 58 per cent of GDP is contributed by industry related commodities such as agricultural commodities like wheat, rice, tea, jute, spices, soybean, groundnut, coffee, rubber and cotton, he added.

Mr Singh said government has several steps for the development of the commodities market like consultancy assignments, training programmes, study tours, and office automation of FMC.

Efforts for creating awareness among market participants, particularly farmers through awareness campaign is being conducted in various parts of the country in association with the exchanges, added the minister.

The minister also said the government is aware of the problems faced by the commodities market and is taking concrete measures to tackle them. One of the issues is the smoothening of the physical delivery system and a stable delivery mechanism for the product is needed, he added.

He said quality assurance is a major challenge and said it lends credibility and confidence to participants in commodity market exchange. He emphasised on the need to create a national trasportation, logistics and distribution infrastructure for commodity if India wants to emerge as a global power in commodity exchanges.

The National Road Transportation Network, Port Development and New Warehousing initiatives mark the beginning towars this direction, he added.

The minister also said that manufacturing is the frontier of commodity market exchange opportunity after agriculture and added the country has the ability and the potential to become a global manufacturing hub.

UNI MP PV VV1737