ID :
13208
Mon, 07/21/2008 - 10:01
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http://m.oananews.org//node/13208
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There is nothing more to ban in futures trading, says F.M.
New Delhi, July 21 (PTI) Finance Minister P. Chidambaram has said the government will take a call on notifying the Commodities Transaction Tax and ruled out imposing a ban onthe futures trading of more commodities.
"We will see...At least in the first year, it is not intended to be a great revenue-earning measure. We can take a call on the date," he told P.T.I. while replying to a query about delay in notifying Commodities Transaction Tax (C.T.T.)even after Parliament approval.
Asked whether ban on futures trading would help in containing food prices, the Finance Minister said, "According to the expert committee, there is no connection between banning forward trading and prices." "Regardless of the expert's view, we have banned forward trading. You can call that wise economic decision or a wise political decision, we have taken that decision. But expert says there is no causal connection between one and the other,"he said.
On the issue of C.T.T. he said, like Securities Transaction Tax (S.T.T.), Commodities Transaction Tax was intended to bring some order and reduce volatility in themarkets.
During the Budget presentation, he had said, "Transaction in commodity futures has come of age. Hence, I propose to introduce Commodities Transaction Tax (C.T.T.) on the same lines as S.T.T. on options and futures." Under the proposal, Rs 17 will be charged as C.T.T. on a transaction of Rs 1 lakh. The proposal has been opposed by the commodity exchanges and regulator, the Forward MarketCommission.
Asked if the government plans to ban more commodities, Chidambaram said, "There is nothing more to ban." "Crude is not produced. Crude is traded in other markets (New York-based) NYMEX and (London-based) I.C.E. Crude prices are not decided in the Indian market. Crude prices are decidedby two markets --NYMEX and I.C.E. in London," he added.
On the option of putting a ban on futures trading of steel, the minister said: "I do not know. It is traded, no doubt. But is it volatile? It is not volatile." Regarding gold, he said its prices are not fixed by the Indian market, but by world markets. "There is no gold produced in India." The Centre had banned futures trading of wheat, rice, tur and urad early last year and added four more items -- soya oil, rubber, gram and potato-- in May 2008 to the list of banned items amid allegations from political parties that suchtrading led to price rise.
Asked if he is happy to put restrictions on the forward trading, Chidambaram said: "See, it is not a question whether I am happy or unhappy. That was a universal demand of all political parties, including my own. Therefore we haveresponded.
"And sometimes in a democracy, you have to respond to the political demands of parties, including your own party, even if the expert says he is not able to find a causal connection." Commenting on his recent statement in Jeddah that speculation is fuelling crude oil market, he said, "There is evidence for that. Petroleum ministry has volumes of literature. Before I went to Jeddah, I did go through a good part of that literature...We are completely convinced that any price of over 60 dollars a barrel is the speculative element." PTI
"We will see...At least in the first year, it is not intended to be a great revenue-earning measure. We can take a call on the date," he told P.T.I. while replying to a query about delay in notifying Commodities Transaction Tax (C.T.T.)even after Parliament approval.
Asked whether ban on futures trading would help in containing food prices, the Finance Minister said, "According to the expert committee, there is no connection between banning forward trading and prices." "Regardless of the expert's view, we have banned forward trading. You can call that wise economic decision or a wise political decision, we have taken that decision. But expert says there is no causal connection between one and the other,"he said.
On the issue of C.T.T. he said, like Securities Transaction Tax (S.T.T.), Commodities Transaction Tax was intended to bring some order and reduce volatility in themarkets.
During the Budget presentation, he had said, "Transaction in commodity futures has come of age. Hence, I propose to introduce Commodities Transaction Tax (C.T.T.) on the same lines as S.T.T. on options and futures." Under the proposal, Rs 17 will be charged as C.T.T. on a transaction of Rs 1 lakh. The proposal has been opposed by the commodity exchanges and regulator, the Forward MarketCommission.
Asked if the government plans to ban more commodities, Chidambaram said, "There is nothing more to ban." "Crude is not produced. Crude is traded in other markets (New York-based) NYMEX and (London-based) I.C.E. Crude prices are not decided in the Indian market. Crude prices are decidedby two markets --NYMEX and I.C.E. in London," he added.
On the option of putting a ban on futures trading of steel, the minister said: "I do not know. It is traded, no doubt. But is it volatile? It is not volatile." Regarding gold, he said its prices are not fixed by the Indian market, but by world markets. "There is no gold produced in India." The Centre had banned futures trading of wheat, rice, tur and urad early last year and added four more items -- soya oil, rubber, gram and potato-- in May 2008 to the list of banned items amid allegations from political parties that suchtrading led to price rise.
Asked if he is happy to put restrictions on the forward trading, Chidambaram said: "See, it is not a question whether I am happy or unhappy. That was a universal demand of all political parties, including my own. Therefore we haveresponded.
"And sometimes in a democracy, you have to respond to the political demands of parties, including your own party, even if the expert says he is not able to find a causal connection." Commenting on his recent statement in Jeddah that speculation is fuelling crude oil market, he said, "There is evidence for that. Petroleum ministry has volumes of literature. Before I went to Jeddah, I did go through a good part of that literature...We are completely convinced that any price of over 60 dollars a barrel is the speculative element." PTI
