FCRA revamp bill to be back on track?

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Devotees perform “pind daan”, a ritual for salvation of departed souls of their ancestors during the start of Pitra Paksha

With Trinamul Congress (TMC) out of the UPA, the government now plans to bring back on the agenda of the Union Cabinet the proposed amendment bill to change the controversial commodity trading law, Forward Contract Regulation Act (FCRA). Twice the legislation was brought before the Union Cabinet for its approval, but a decision on this was put on hold because of the TMC’s opposition.
Sources in the government said, since a decision on the proposed amendment bill was only deferred and the ministry of food and civil supplies did not withdraw the proposal, moves are afoot to list it once again for the consideration of the Union Cabinet. “Most likely the item will be put on the agenda of the meeting of the next Cabinet itself,” they said.
The Bill, which was introduced in the Lok Sabha in December 2010 and referred to the parliamentary standing committee, would be taken up by the Cabinet sometime later, food minister K.V. Thomas had informed earlier.
The Bill is essential for the development of commodities future market as it aims to strengthen the regulator by providing it financial autonomy, facilitate the entry of institutional investors and introduce new products for trading such as options and indices.
The standing committee on food, consumer affairs and public distribution, headed by Vilas Muttemwar, had submitted its report on December 22, 2011. It has recommended greater autonomy for the regulator, which regulates both spot and future commodity exchanges.
The panel had also suggested allowing financial institutions and banks, mutual funds, and insurance companies to participate in forward market so as to ensure better price discovery and lower volatility.
Currently, there are five national and 16 regional commodity exchanges functioning in the country. Their annual turnover stood at `181.26 lakh crores during the 2011-12 fiscal.