The Hindu Business Line : Govt mulls ban on agri futures trading

The Government is contemplating a ban on futures trading in all agricultural commodities, according to a note circulated by the Minister of State for Industries, Mr Ashwani Kumar, here on Thursday.

There has been reports that the future trade is shifting towards black market trade to avoid payment of taxes to the Government. In this context, it is widely reported that the Ministry of Commerce and Industry is contemplating to ban futures trade in agricultural commodities, the note said.

The Minister told in a press conference here that though the Abhijit Sen panel report did not recommend ban on futures, on Wednesday, the Government, as a temporary measure, has suspended futures in for more agricultural commodities – potato, soya oil, chana and rubber — for four months.

“The ban on these four items is only a precautionary measure”, he said.

Taming inflation

The Minister said that the measures initiated to tame inflation are yielding results. Inflation would come down by more than one percentage point within in the next six to eight weeks according to extrapolated data analysed by the Department of Industrial Policy and Promotion (DIPP), he said.

Sharing price trend data with reporters here today, Mr Ashwani Kumar, said that prices of rice, wheat, pulses, edible oils, cement and steel have already come down and, except rice, the prices are expected to soften further in the next one to two months.

Administrative Measures

“The Government is not helpless and has means to ensure prices are brought down. A series of calibrated measures - both administrative and fiscal - are in the offing to control inflation,” he said.

The administrative measures will include steps to restrain the inclination of producers to increase prices simply because the situation allows them to exploit, the note pointed out.

Reiterating the Government resolve on not compromising growth in the process of taming inflation, the Minister said that “our policy initiatives will bring down prices without slowing down growth. We will achieve eight per cent growth and also maintain prices,” he said.