Pawar: In action

Mumbai, Dec. 17: The Union government is planning to make the Forwards Markets Commission (FMC) an autonomous and independent regulator to provide impetus to futures trading in commodities.

This was indicated by Union minister for agriculture and consumer affairs Sharad Pawar here today.

Speaking to newspersons on the sidelines of a seminar on commodity exchanges, Pawar said the government would introduce a bill in the budget session of Parliament to make FMC an independent body and introduce trading in new products in the commodities futures market.

According to Pawar, the Centre is also planning to overhaul a number of legislations, like the essential commodities act and the prevention of food adulteration act, to facilitate better internal trade in commodities.

He expressed the hope that the warehousing (development and regulation) bill, which has already been tabled in Parliament, will be passed in the current session. The bill aims at making warehouse receipt a fully negotiable instrument.

On the bill to amend the Forward Contracts (Regulation) Act, 1952, the Union minister said the move was aimed at making statutory provisions more contemporary.

Pawar expressed the view that if the amendments are carried through, it will strengthen and restructure the FMC and make it an autonomous and independent regulator.

The commission, which is now a department under the ministry of consumer affairs, will have enhanced regulatory and penal powers after the amendments.

The proposed amendments to this act, he added, would bring changes in the definitions to enable trading in new products such as weather and rainfall indices. This would benefit farmers by providing additional cover against the vagaries of weather. It would also lead to the introduction of option contracts.

It also includes the provision for setting up of the Forward Markets Appellate Tribunal on the lines of the Securities Appellate Tribunal (SAT).

L. Mansingh, secretary, consumer affairs, who also participated in the conference, said after the amendments are carried out, the FMC would remain autonomous till three years, thereby ruling out speculations on its immediate merger with the Securities and Exchange Board of India (Sebi).