The ban on futures trading in wheat has been lifted by the government after two years because wheat stocks are in surplus now. Futures trading in rice, tur and urad are still banned. Last month, BC Khatua, chairman Forward Markets Commission, had said that he hoped the ban on all three items would go before the elections and the Elections Commission’s approval had been sought for lifting the ban. The ban was imposed in early 2007 to curb inflation and also ensure sufficient procurement for the buffer stocks. The then finance minister, P Chidambaram had said the ban would be in force until a committee set up under Prof Abhijit Sen submitted its report. Though the Sen Committee argued that there was no correlation between futures trading and inflation and recommended that the ban be lifted, no decision was taken in view of rising food prices and, later, elections. The situation is different now with the rate of inflation running lower than 1% and the granaries overflowing.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam