Monday April 6, 2020
Home India Arun Jaitley ...

Arun Jaitley flags merger of watchdogs for equities, commodity futures

0
//

By NewsGram Staff Writer

Mumbai: Finance Minister Arun Jaitley on Monday rang the symbolic opening bell to mark the merger of two market watchdogs, the Forward Markets Commission for commodity futures with the Securities and Exchange Board of India, at a function here. While the commodities futures regulator was set up in 1953, the stock and debt markets regulator was set up in 1988 as a non-statutory body and later became an autonomous and fully-independent institution in 1992.

Arun-Jaitley2
www.financialexpress.com

“This merger indicates how the size of our markets have grown and how India has now become more aspirational,” Jaitley said at the function at the Trident hotel in downtown Mumbai.

“It also reflects how sectoral challenges have changed.” The finance minister said India had to continue to change, evolve and reform. “Our nation is no longer satisfied with 6-8 percent band of growth,” he said, adding that this had become even more compelling since the world today was looking at India differently with much expectation.

SEBI chairman U.K. Sinha said the priority post the merger would be to develop trust in India’s commodities market. “All steps will be taken to develop the market,” he said. Jaitley had indicated an early merger of the watchdogs in his budget speech earlier this year.

“I also propose to merge the Forwards Markets Commission with SEBI to strengthen regulation of commodity forward markets and reduce wild speculations. An enabling legislation, amending the Government Securities Act and the RBI Act is proposed in the Finance Bill, 2015,” he said.

The merger on Monday was the result of the suggestions made in May 2003 by the Inter-Ministerial Task Force on Convergence of Securities and Commodity Derivatives Markets, chaired by bureaucrat Wajahat Habibullah.

“Even though there are some differences in commodity and financial derivatives markets, they have close resemblance in so far as trade practices and mechanism are concerned. Indian securities market has witnessed significant structural change since 1990’s,” the task force said.

“If derivatives in commodities resemble securities, then the developmental challenge of obtaining sound institutions for trading commodity derivatives can be eased by using the stable and mature institutions that are found in the securities markets,” it said.

“If the institutions of the securities markets are used, this would speed up the pace at which modern market institutions become available to farmers, and accelerate the growth rate of the agricultural sector.” Other benefits outlined for merger include: Economies of scale and scope, the possibility of strengthening the commodity spot market, better serving of stakeholders, strengthening the price discovery for farmers and desirable impact on the informal market.

(With inputs from IANS)

Next Story

Scheme to Spur Mobile Phone, Semiconductor Manufacturing Soon: FM Nirmala Sitharaman

Already, India, which has second position in the global mobile handsets market, is projected to grow to 302 million units this year

0
Economy, Nirmala Sitharaman
FM Nirmala Sitharaman stated that India is still projected to be the fasteat growing economy. Wikimedia Commons

Finance Minister Nirmala Sitharaman on Saturday said a scheme on encourage manufacturing of mobile phones, semiconductor packaging and electronic equipment is on the anvil.

Making the announcement in the Budget speech, she said: “There is a cost advantage for electronics manufacturing in India”.

But she says that this needs more investment. “I propose a scheme to encourage manufacturing of mobile phones, semiconductor packaging and electronic equipment”, she said, adding this can be used for manufacture of medical devices as well.

A detailed scheme with details will be released soon, the FM said.

A Modified Special Incentive Package Scheme (MSIPS) to promote aggressively a 20-odd component manufacturing ecosystem in the country that will go beyond making mobile phones could be on the anvil. This could be an overarching policy which goes beyond interest subvention and credit default guarantee and it will be outside the scope of MeitY (Ministry of Electronics and Information Technology) and by an outside department/arm since ministry’s role is that of a policymaker only.

Finance, Minister, Nirmala Sitharaman, GDP, Measures
There is concern about the speed and nature of the government and industry’s response, and will these actions turnaround things immediately, or not. Pixabay

M-SIPS was first floated to encourage electronics manufacturing and it ran from 2012 to 2018. It promised multiple incentives for 10 years, including a capital subsidy of 20 per cent in special economic zones (SEZs) and 25 per cent in non-SEZs, and reimbursements of countervailing duty or excise on capital equipment for non-SEZ units.

For some high-capital projects, it also offered reimbursement of Central taxes and duties. The incentives were available for 29 electronic verticals across the manufacturing value chain. The period of benefits was reduced to 5 years from 10 years after it was recalled.

M-SIPS was created to provide financial incentives across the ESDM (Electronics System Design and Manufacturing) value chain to compensate for cost disability in manufacturing and Electronics Manufacturing Clusters (EMC).

Also Read: Several Pixel 2 Owners Bugged by Camera Failure Post Updates

This sector has shown tremendous promise wherein exports have grown from a mere US $200 million three years ago to over $2 billion in the year 2019-20 in handsets alone — a 10x growth in 36 months.

One of the most successful stories around Make in India is mobile handset manufacturing with Noida outside Delhi becoming the new hub. The size of the domestic mobile manufacturing industry in FY 2019-20 is expected to be Rs 1,35,000 crores as against Rs 94,000 in FY 2016-17.

Already, India, which has second position in the global mobile handsets market, is projected to grow to 302 million units this year. (IANS)