Budget 2015: Commodity industry expects relief on CTT, says Ventura

Pre-Budget expectations for commodity market by Ventura

Pre-Budget wishlist and industry demands

This year too the commodity industry expects some relief on the Commodity Transaction Tax (CTT) which has reduced trading volumes drastically in futures trade which has proved to be an efficient mechanism for price discovery and hedging.

Exempting processed agri-commodities such as sugar, mentha oil, soya oil and guar gum would go a long way in bringing back volumes and reducingvolatility.

The CTT imposed on metals and energy commodities have led to 42% fall in trade volumes to 51.3 lakh cr this fiscal to beginning April 2014-January2015.

Gold industry is expecting a drastic drop in import duties from 10% to 2% levels although there is no clear indication whether this would happen.

Amendment of FCRA: Traders and investors from commodity derivatives market are expecting the government to announce steps to restructure theForward Contracts Regulation Act (FCRA).

This would increase depth in the market and will help in efficient price discovery. There is a need to increase market participation by allowing banks, MFs, FIIs which will also help in preventing price manipulation and help hedgers to efficiently hedge their exposure in physical markets.

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