The Hindu Business Line : Changes to Forward Contracts Act soon: Pawar<br> `Monsoon situation has improved, encouraging'

FUTURE MATTERS: The Union Minister for Agriculture, Mr Sharad Pawar, discussing a point with the Assocham President, Mr M. K. Sanghi, during the conference on "Commodity futures markets in India" in the Capital on Thursday.— Kamal Narang

New Delhi , July 14

THE Government plans to amend the Forward Contracts (Regulation) Act 1952 (FCRA) to bring the provisions in tune with the current times and also strengthen and restructure the Forward Markets Commission (FMC), Mr Sharad Pawar, Union Minister for Agriculture, Consumer Affairs, Food and Public Distribution, has said. Addressing a conference on the commodity futures markets in India, organised by Assocham, Mr Pawar said the amendments also provide for setting up of a Forward Markets Appellate Tribunal on the lines of the Securities Appellate Tribunal (SAT).

Indications are that the Bill to amend the FCRA may be introduced in the forthcoming monsoon session of Parliament.

Mr Pawar also underscored the need to generate awareness about commodity futures trading and its advantages amongst millions of small and marginal farmers. He urged the commodity exchanges to take the message on a large scale, in tune with the magnitude of the country, to producers of all commodities so that they benefit from the price discovery and risk management functions of futures markets.

Stating that various enabling issues pertaining to the development of modern warehousing infrastructure all across the country were being looked into, Mr Pawar also said the Government proposed to introduce a Bill in Parliament on Warehousing Development and Regulation. Besides, it was looking into issues such as negotiability of warehousing receipts.

It had also taken up with the Reserve Bank of India (RBI) the issue of participation of banks and foreign institutional investors in the commodity futures market and especially their role as an aggregator.

On agriculture, Mr Pawar expressed confidence that this year would be one of the best for agriculture production. On the monsoon, he said the situation was improving even while admitting that it had been worrisome a month ago.

"We have reviewed the ground level situation and fortunately in the last one week, the monsoon situation has improved and is encouraging," Mr Pawar told newspersons on the sidelines of the conference.

The FMC Chairman, Mr Sundareshan, told newspersons that the proposed amendments to FCRA would bring about both functional and financial autonomy to the FMC, which is currently functioning as a department of the Government. "As and when the amendments are made, FMC would function as an independent regulator and generate its own resources for regulating the commodity exchanges," he said.

On allowing FIIs to participate in the commodity futures market, Mr Sundareshan said a sub-committee of the FMC was already looking into this issue. Its report would be ready by the end of this month.

As regards allowing options trading in commodities, he said the FCRA had to be amended for this purpose.

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