Govt decision on futures ban an overreaction: Sen

The committee's chairperson and members today expressed their disappointment calling the decision "irrational".

"It is obvious that the government has taken a decision without taking our view into consideration. There is a bit of overreaction," chairman of the committee and Planning Commission member Abhijit Sen told Business Standard.

The committee, which was set up by the government in 2007 to study the link between futures trading in essential items and impact spot prices, submitted its report last week.

The government late on Wednesday imposed a four-month ban on futures trading in potato, chana, soyoil and rubber as a precautionary move to check price rise and control inflation. Last year, the government had imposed an indefinite ban on trading in wheat, rice, urad and tur.

"In the report, three members had opposed any sort of ban on futures trading. I had simply said the present suspension should continue. In case of a few other commodities like edible oil and sugar, people should be consulted to know how much benefit is there in risk management of such commodities. But that was a minority view," Sen added.

Another committee member and Parliamentarian Sharad Joshi said the government has acted against all logic.

"After a majority of members in the committee said there is no direct relation between futures trading and price inflation, such a ban proves that the government is going by the advice of the Left, not experts."