Post Budget comments from the commodity futures market - Geofin Comtrade

Mr. Hareesh V. Senior Analyst/Research Head, Geofin Comtrade Ltd.

The union budget for 2016-17 presented by Finance Minister has offered many proposals to lift the Indian agriculture and rural sector. The budget offers enormous support to boost the Indian villages and agriculture sector with the aim of doubling the farmers' income in five years. It also aims to enhance rural employment and infrastructure. Points like, Government's target on agriculture credit, allocating funds for crop insurance schemes, support for organic farming and suggestion to bring 28.5 lack hectares of land under irrigation facility will assist the Indian agriculture sector and the rural economy as a whole. Also, interest subvention to farmers to reduce burden of loan repayment, incentives to boost pulses production and setting up an e center for agriculture 'kendras' around the country are the other allocations in the budget to assist the farming sector.

In commodities front, the introduction of new derivative products is likely to strengthen the commodity derivative market. Meanwhile, there were many other proposals from different industries were not considered. Removal or of cut in Commodity Transaction Tax was one of the important proposals from the commodity market participants which was not considered. There were proposals from the bullion industry to cut the import duty on gold from the current ten percent to two percent, increase in import duty of natural rubber from the current 25 percent to 40 percent, cut in import duty on maize and oil seeds were the other proposals from the commodity participants that were not considered in the budget as well.

Source : Equity Bulls

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