Business Daily from THE HINDU group of publications
Friday, Jul 03, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Friday, Jul 03, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Agri-Biz & Commodities
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Commodity Exchanges Industry & Economy - Economic Survey Web Extras - Commodities Lift remaining ban on futures, amend APMC Acts of States Our Bureau Chennai, July 2 Within five days of being sworn in again, the United Progressive Alliance (UPA), Government of Dr Manmohan Singh barred sugar futures till December 31. Yet, the Economic Survey talks of lifting “the remaining ban on futures contracts to restore price discovery and price risk management”. In fact, the UPA had resorted to banning futures in rice, wheat, arhar, tur, soya oil, rubber, chana and sugar as part of its efforts to curtail inflation. If the Survey is hinting at undoing what the UPA has done in the last three years, then there is another effort to revoke something it did in the last Budget. This is “review and phasing out of surcharges, cesses and transaction taxes (such as commodities transaction tax…),” says a note on fiscal sustainability and tax simplification. The Survey calls for extending spot commodity trading in electronic form to agricultural markets by involving the Agricultural Produce Marketing Committees (APMC). Thanks to the initiatives of MCX and NCDEX, spot trading in various commodities is becoming popular and looked up on as the most transparent form of getting fair price for farmers. These two exchanges have set up their own spot trading platforms, NCDEX Spot Exchange Ltd and National Spot Exchange Ltd. If electronic spot trading is to be extended, the APMC Acts by various States will need to be amended. The Centre has come up with various measures to encourage the States to make the necessary amendments and it would be worthwhile to watch what the Budget will have in store for furthering this. Another protracted issue that finds mention in the Survey is decontrol of sugar and fertiliser industry “simultaneously converting any producer subsidies into direct consumer subsidies.” For the sugar industry, the recommendations by the B.B. Mahajan Committee to decontrol have been pending for over a decade now. A positive aspect of the Survey is the recommendation that the Government “introduce smart-cards, vouchers or bank accounts” for farmers for entitlement of free or low-cost water in areas where it is scarce. This is to ensure efficient use of the scarce water resources and that commercial users pay for it.
Regretting the prevalence of hunger and malnutrition despite the country being self-sufficient in food production, the Survey calls for redesigning of various government programmes and addressing the concerns in a time-bound manner. Towards this, the Survey talks of a mission approach for promotion of the smart-card and its cross referencing it to the ration and the voter identity cards for better targeting, reduced leakages and easier administration. The Economic Survey also wanted renewed focus to improve productivity and step up growth of allied and non-farm activities to increase value-addition. It also talks of the considerable scope to develop micro-irrigation systems and watersheds besides developing marketing infrastructure, storage, warehouses and cold-chains driven by modern technology. More Stories on : Commodity Exchanges | Economic Survey | Commodities
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