Sucheta Dalal :Commodities futures (4 March 2002)
Sucheta Dalal

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Commodities futures (4 March 2002)  

One of the finance minister’s Budget announcements in connection with agriculture reforms was to ensure ‘expansion of futures and forward trading to all agricultural commodities’. In fact, several bourses have sprung up over the last year offering futures contracts in various commodities. What is however missing, is a large commodity exchange on the lines of the Chicago Board of Trade that offers a vast number of commodity trading products in one place. A consortium comprising ICICI and Mahindra and Mahindra, the National Stock Exchange and the Punjab Warehousing Corporation had won a mandate to set up such an exchange a few years ago, but it has made no headway. The problem was apparently a misguided promise to the Punjab Chief Minister that the bourse would be headquartered there. If Yashwant Sinha is serious about encouraging commodity futures, he should get this important project off the ground. Now that the Punjab government has also changed, the consortium should be ordered to set up the bourse or the government should simply invite fresh bids.

From jhunka-bhakar to wine bars?

When the Shiv Sena-BJP government come to power in Maharashtra, jhunka-bhaker stalls mushroomed all over the State in line with their promise to provide basic sustenance at affordable rates. The Congress-NCP government however has different preferences. It plans to promote alcohol consumption—albeit the less potent variety. Over a year ago, a flamboyant liquor baron had met State leaders to convince them that promoting beer bars with excise concessions was a good idea. They were told that youngsters should be encouraged to drink beer because it contained less alcohol, by making it more affordable. Otherwise, they switch to hard liquor which was more potent but less expensive. Obviously, mushrooming beer bars spelt big business to the beer industry. But the business interests of the politicians and industrialist did not seem to coincide. The government has now switched the idea of beer/ jhunka-bhaker with wine bars (although wine salons would sound infinitely better). It will permit the setting up for exclusive bars at a nominal fee, in every by-lane of Maharashtra, so long as it sells nothing but wine. Naturally, the Chaugules of the Indage group are taking the lead in setting up these bars. Now that Maharashtrian vineyards have begun to produce world-class wines, it seems like a great idea to promote its consumption in the State. But how does this square with government’s otherwise puritanical attitude with regard to consuming alcohol?

Bail default

A regular at Moksh—Pritish Nandy’s fitness club in Mumbai is the stock operator Ketan Parekh. Parekh is out on an unique bail condition that let him draw up a scheduled repayment of his dues to the Madhavpura Mercantile Cooperative Bank (MMCB). This bank had gone belly up because its cozy nexus with the broker had allowed him to borrow an unauthorised Rs 1,000 crore from the bank without any security to ramp up prices. Parekh was to repay Rs 16 crore to MMCB by February 24, but has managed to pay up only Rs 9 crore. However, now that MMCB has been bailed out at Home Minister L.K. Advani’s personal intervention, nobody seems in any hurry to recover the money. No further charges have been filed and Parekh and he is allowed build his muscles in peace.

Essar stands up for Enron

Even the Finance Minister could not have missed the irony. In his post-budget interaction with members of the Federation of Indian Chambers of Commerce and Industry (FICCI) on Friday, one industrialist suddenly stood up to plead the case of Enron’s closed power project at Dabhol. Not it wasn’t Robert Blackwill masquerading as FICCI member, it was Shashi Ruia, chairman of the Essar group. It soon became clear that Ruia wasn’t really making a case for Enron, but companies like it which had boldly embarked on big-ticket projects at the highest interest rates without worrying about viability. Naturally, several Essar projects are in that same boat and have sought frequent restructuring of their repayment obligation from financial institutions.

TAILPIECE: He is the big chocolate addict who lives by the yuppie credo that greed is good. This means that he plays elaborate tricks to swipe his girlfriend’s chocolate and she returns the compliment (Cadbury would have us believe that in yuppiedom, love is not about sharing your chocolates). But hang on, the next commercial break has the same yuppie (Rajat Kapoor) now using a computer to count the calories he has saved in his many cups of tea with Cadila’s Sugar Free. Give us a break guys, Rajat Kapoor does have the perfect yuppie look to sell everything from luxury cars to Ayurvedic Concepts but at least make up your minds whether he is calorie conscious or a chocolate addict.

-- Sucheta Dalal