Faced with a widening deficit of talent due to the lack of adequate commodity-centric academic institutes in India, the Forward Markets Commission (FMC), the commodity markets regulator, has proposed to set up a National Institute of Skill Development. It sent the proposal recently to its parent ministry, food and consumer affairs.
The institute is proposed to be set up at the outset of the 12th five-year Plan, which begins next month, at an initial expenditure of Rs 90 crore. The idea is degree and diploma courses in the commodity markets. This should feed the needs of exchanges, broking firms, market participants, research institutes and all others involved in the commodity derivatives market. According to an estimate, these firms are currently operating with only a third of the trained staff they need, hiring fresh university graduates and doing everything to retain them after training. FMC faces a similar staff shortage.
“We have sent our proposal to the ministry. Once the clearance comes, we will work out the details of location and timing,” said Ramesh Abhishek, chairman of FMC, on the sidelines of a seminar here.
Currently, there is no such dedicated institute in the country. The proposed one would provide job-oriented educational and technical skills. At present, traders, hedgers and other market participants learn through awareness programmes organised by FMC and commodity exchanges. Many individual traders are well trained through personal experience but lack a certificate to support their practical skill. Professionals from commodity exchanges and the regulator’s office educate participants about ways to take advantage of the futures commodity exchanges and the risk involved in commodity hedging.
When asked if commodity exchanges would also fund the capital outlay for the proposed institute, Abhishek said, “We will decide once the approval comes from the ministry.”
Talking at the same seminar, organised by Financial Technologies, Parveen Kumar Singhal, deputy managing director of the Multi Commodity Exchange, said the rapid growth of the Indian commodity futures market had continued year after year. India contributed 15 per cent of the global commodity futures volume in 2011, as compared to eight per cent the previous year.
According to Abhishek, from Rs 66,000 crore worth of futures trading recorded in 2003 in the three national commodity exchanges, the total traded value has gone up to Rs 1,66,00,000 crore in the first 11 months of the current financial year.
Five national comexes and 16 commodity-specific regional exchanges offer futures trading in 116 commodities, of which 50 are highly active.
About online spot commodity exchanges, Abhishek said the FMC had written to the agriculture ministry for bringing them under it. “We hope for some concrete decisions soon,” he added.
