A Parliamentary panel today suggested the commodity markets regulator FMC seriously consider handing over cases of irregularities and malpractices in commodity exchanges to the CBI for proper investigation.
“The Committee recommended that the Forward Markets Commission (FMC) should seriously consider that cases of malpractice noticed in the national and regional commodity exchanges should be handed over to the CBI for proper and thorough investigation,” the Parliamentary Standing Committee on Demands of Grants for 2012-13 said in its 18th report.
“Despite the regulatory mechanism in FMC,there are reported cases of trading irregularities and market manipulations”,a statement on the Committee report headed by Vilas Muttemwar,tabled in Parliament today,said.
The CBI should investigate “those cases so that offenders,however wealthy and powerful they may be,are brought to justice,” it said.
The committee said :”Those powerful traders (who) indulged in malpractices have no fear of the authority conferred on FMC under the Forward Contracts (Regulation) Act,1952,nor they are bothered about the fine that can be imposed on them”.
Early this year,regulator FMC had barred five brokers from the futures market for up to one year. This was over irregularities in guar gum and guar seed trade that led to an abnormal increase in their prices by over two-fold since November,2011.
To curb speculative trading,FMC recently directed exchanges to terminate all existing contracts of guar futures.
It has has also taken steps through increasing margin and reducing position limits to check price volatility in some commodities like chana.
FMC under the aegis of the Consumer Affairs Ministry oversees the functioning of five national and 16 regional commodities. The combined turnover of commodity exchanges was Rs 181.26 lakh crore in 2011-12 fiscal,52 per cent higher than the previous year.
In order to curb malpractices,profiteering and hoarding of essential commodities,the Committee suggested the Centre should impress upon the state governments to enforce the provisions of the two Acts — the Essential Commodities (EC) Act and the Prevention of Black-marketing and Maintenance of Essential Commodities Act — more vigorously.
It observed that the number of raids conducted,number of persons arrested,prosecuted and convicted and the value of goods confiscated in 2009,2010 and 2011 for violation of the EC Act “are very negligible given the large population and size of the country”.
On mandatory gold hallmarking,the Committee suggested the government issue instruction for display of prices of gold articles by jewellery shops besides introduction of the BIS Amendment bill during the current session.
It also asked the government to simplify the formalities and increase the amount of financial assistance under the Hallmarking scheme.
To monitor prices of essential commodities,the Panel has recommended the government make efforts to set up more reporting centres to improve data collection and also strengthen the monitoring mechanism to stabilise prices of essential items.
The panel further suggested the government should impart training to more officers of states for strict implementation of Weight and Measures laws.