Sen panel report on futures out

Written by Commodities Bureau | New Delhi, Mumbai, Apr 29 | Updated: Apr 30 2008, 06:11am hrs
The expert panel on futures trading headed by the Planning Commission member, Abhijit Sen, on Tuesday, submitted its long-awaited recommendations to the government. The panel did not recommend a ban on futures trading, but wanted the existing temporary suspension of futures trading in wheat, rice urad and tur to continue for some time.

The terms of reference before the panel was not to suggest whether a ban should be imposed on futures trading or not. Hence the panel did not want to overstep its limit, said Sen. The panel suggested strengthening of Forward Markets Commission and the commodity exchangees to deal with proper functioning of futures trading in a transparent manner. The panel report also said that statistically there was no perfect model to find the linkage between futures trading and the present situation of rise in prices of essential commodities.

However, the panel report contains some dissenting voices from its chairman Abhijit Sen on certain issues, while other four members suggested operation of futures market without any unnecessary hindarances .

There are suggestions in the report for buffer stocking of commodities by different agencies and offloading of stocks at the time of price rise. On April 16, Pawar said in Parliament that government would take a call on banning the futures trading in essential items after next 10 days in case it did not receive the committee report.

Besides Sen, other members of the panel are Rajya Sabha MP Sharad Joshi, Forward Markets Commission Member Kewal Ram, Prakash Apte of IIM-Bangalore and Siddharth Sinha of IIM- Ahmedabad. The government banned futures trading in wheat, rice, urad and tur last year following demand from UPA allies, which wanted a complete ban on forward trading of all essential commodities.