Daily average futures trading volume of the commodity derivative market (CDM) in the country has come down by nearly 40% to Rs 15,000 crores this month from average Rs 25,000 crores last month on proposed commodity transaction tax (CTT) amid fears among the market participants that the government may extend ban in more agri-commodities.
This was stated by BC Khatua, Forward Markets Commission (FMC) chairman, on the sidelines of CII event on energy trading and derivatives held here on Tuesday. The daily average volume of MCX has gone down from average Rs 14,000 crore to Rs 11,900 crore this week while average volume of NCDEX has also come down from Rs 4,000 crores to Rs 2,000 crores daily, sources said.
?I feel that CTT on commodity futures should not be levied as there is no such tax in the world elsewhere. It may shift trading to the grey market,? he said. The government had banned futures contracts in wheat, rice, tur and urad early last year on fears it would stoke inflation. Afterwards, the government also set up a committee headed by Abhijit Sen to probe whether futures trading in commodities were linked to price rise.
?There are enough indicators that show there is no link between commodity futures trading and recent price increase,? Khatua said.
Commenting on Sen Committee report, Khatua said that the draft report has been sent to the members of the committee and one member has sent his comments. I believe other two members are submitting their comments in a day to two.
The government had set up the four-member expert committee last year to study the extent of impact, if any, of futures trading on wholesale and retail prices of agricultural commodities. Apart from Planning Commission member Abhijit Sen, other members of the committee are Rajya Sabha MP Sharad Joshi, FMC member Kewal Ram, Prakash Apte of IIM Bangalore and Siddharth Sinha of IIM Ahmedabad.