Forward Trading and Forward Markets Commission

The Forward Markets Commission is a statutory body set up under Forward Contracts (Regulation) Act, 1952 and functions under the administrative control of the Ministry of Consumer Affairs, Food and Public Distribution. The Commission regulates forward markets in commodities through the recognised associations, recommends to the Government the grant/withdrawal of recognition to the associations organising forward trading in commodities and makes recommendations for the general improvement of the functioning of forward markets in the country.

With the issue of the notification dated the 1 April 2003 the Government permitted futures trading in 54 more commodities. Hence, prohibition of futures trading in commodities stands completely withdrawn. Non-Transferable Specific Delivery (NTSD) contracts being genuine merchandising contracts were brought outside the review of regulation/prohibition by exempting NTSD contracts in 37 commodities from the operation of Section 17 read with Section 18(3) of the Act. Therefore all NTSD contracts are now outside the purview of prohibition and regulation of the Forward Contracts (Regulation) Act, 1952. Futures Trading in Bullion (gold and silver), Wheat and Rice has been commenced after a long gap. Futures trading facilities have been extended to Jammu and Kashmir.

To improve the functioning of the exchanges and also to adopt better trade practices in order to create confidence among potential participants, the Commission along with the various stakeholders has conducted massive awareness programmes.

The Government had set up an Inter-Ministerial Task Force on Convergence of Securities and Commodity Derivatives markets, which submitted its Report. In order to chalk out a road map for the Operationalisation of convergence, a Working Group has been constituted with representatives of all concerned Ministries and Organisations.

Three Nationwide Multi-Commodity Exchanges viz., National Multi- Commodity Exchange of India Ltd., (NMCE), Ahmedabad, Multi-Commodity Exchange (MCX), Mumbai and National Commodity and Derivatives Exchange (NCDEX), Mumbai were given permanent recognition to conduct trading in all permitted commodities.

The exchanges have been persuaded to implement various reforms such as online trading, time stamping, trade guarantee and settlement mechanism, one-third independent board representation, and back-office automation for their smooth functioning. In order to increase the volume of trading, the FMC is signing a memorandum of understanding with the Exchanges, setting benchmark targets.

The liberalisation and opening up of commodity market has started showing results in terms of a significant jump in the volume of futures trading in commodities. The exchanges have logged aggregate trade value of Rs 1,30,214 crore during the financial year 2003-04 over Rs 68,276.04 crore during the financial year 2002-03.

The Consumer Protection Act, 1986

The Consumer Protection Act, 1986 was enacted for better protection of the interests of consumers. All the provisions of the Act have came into force from 1 July 1987.

The Act was amended in 1991 and 1993. To make the Consumer Protection Act more functional and purposeful, a comprehensive amendment was carried out in December 2002 and brought into force from 15 March 2003. As a sequel, the Consumer Protection Rules, 1987 were also amended and notified on 5 March 2004. The salient features of the Act are: (i) It applies to all goods and services unless specifically exempted by the Central Government; (ii) It covers all the sectors whether private, public, cooperative or any person. The provisions of the Act are compensatory as well as preventive and punitive in nature; (iii) It enshrines the following rights of consumers: (a) right to be protected against the marketing of goods and services which are hazardous to life and property; (b) right to be informed about the quality, quantity, potency, purity, standard and price of goods or services so as to protect the consumers against unfair trade practices; (c) right to be assured, wherever possible, access to a variety of goods and services at competitive prices; (d) right to be heard and to be assured that consumers' interests will receive due consideration at the appropriate fora; (e) right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and (f) right to consumer education; (iv) The Act also envisages establishment of Consumer Protection Councils at the central, state and district levels, whose main objectives will be to promote and protect the rights of consumers; (v) To provide a simple, speedy and inexpensive redressal of consumer grievances, the Act envisages a three-tier quasi-judicial machinery at the national, state and district levels. These are: National Consumer Disputes Redressal Commission known as National Commission, State Consumer Disputes Redressal Commissions known as State Commissions and District Consumer Disputes Redressal Forum known as District Forum; and (vi) the provisions of this Act are in addition to and not in derogation of the provisions of any other law for the time being in force.

At present there are 35 State Commissions, one in each State/UT and 571 district fora besides the National Commission. The state governments are responsible to set up the district fora and the State Commissions. States have been empowered to establish additional District Forum and also additional members in the State Commission to facilitate constituting benches and also for holding circuit benches. The Central Government is required to set up the National Commission. It has been empowered to appoint additional members to facilitate creation of more benches and holding of circuit benches. The second bench of the National Commission started functioning from 24 September 2003. The government is monitoring the disposal of cases by the consumer courts through National Commission. Since its inception and up to March 2004, 32,910 cases were filed out of which 24,974 cases disposed of in the National Commission. Similarly 3,01,485 cases were filed and 1,97,797 cases disposed of in the State Commissions and 18,86,236 cases were filed and 16,46,698 cases disposed of in the district fora. Overall 18,69,469 cases have been disposed of out of 22,20,631 cases filed with a remarkable disposal rate of 84.2 per cent.

The government has declared 24 December as 'National Consumer Day', since the President gave his assent on that day to the enactment of the historic Consumer Protection Act, 1986. Besides this 15 March is observed as 'World Consumer Rights Day' every year.