Government of India is planning to issue a new ordinance, for amending the Forward Contract Regulation Act (FCRA), to provide sovereignty to Forward Market Commission (FMC) for having a more efficient command in the commodity markets.
Minister of State for Food Processing Industries Subodh Kant Sahai quoted, while addressing a business conference on ‘Commodity Futures Trading’ organised by ASSOCHAM, that government is waiting for the next session of Parliament in which this issue would be put up in the lower house of the Parliament.
This amendment would surely sharpen the teeth of the FMC, as it will become a fully autonomous body after the amendment. “The government will try to amend this Act as soon as possible as it has been already pending for the last three years,“ said union minister.
Addressing to the business leaders and executive, B C Khatua, Chairman of FMC said that this budget session might not prefer the FCRA amendment, so the government had thought of the ordinance.
As it is known that the powers of Ordinances are temporary, and each ordinance has to be tabled in the parliament, when the houses re-assemble. Also the President has got the right to withdraw an Ordinance anytime.
After getting sovereignty, FMC would get powers to recognise or de-list commodity exchanges, and would be able to allow trading of more commodities by the commodity exchanges, informed Kathua.
The amendment is likely to come on January 24, said Union food processing minister for state.
According to Sahai, Banking Regulation Act of 1949 would also be amended so that the financial institutes and mutual funds, which can also trade these commodities in coming time as that wasn’t allowed earlier because of its listing in the negative list.
Another significant disclosure that was made during the conference by the food processing minister was that “The government will soon take steps to notify permission of 100% FDIs into warehousing and cold storage sector to encourage future market trading in commodities at national level.”
“Government will also soon come up with some amendment in APMC Act so that farmers produce is not auctioned in mandis only.” He added.
However, he clarified that though 100% FDIs are permitted in food processing sector yet FDIs are restricted to cold storage & warehousing sector.
Responding over the delay in amending FCRA Act, FMC chairman said, “Commodities trade has been suffering due to this delay” “Though the volume of commodity trade has risen significantly in the last four years, yet any more delay in the FCRA amendment may lead to shrink in commodities future trade market,” opined Kathua.
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