The newly appointed chairman of the Forward Markets Commission says futures market is in for a healthy growth in India and existing powers of the apex commodities regulator can be effectively used to regulate commodity markets.

FMC Chairman B C Khatua told reporters that the existing laws should ensure that the basic objective of permitting commodity trading-- price discovery and risk management-- are fully met.

The government is considering the amendments to the Forwards Contracts (Regulations) Act, 1952, (FRCA).

Khatua said that his priority will be to ensure that the amendments to the FCRA are passed expeditiously. "We expect an early passage of the Bill," the new FMC chairman said.

He said the FCRA amendments would empower FMC for better and more effective regulation of the commodity markets.

"The laws will ensure that the price signals emanating from the commodity exchanges reflect the actual demand and supply scenario and are free from any manipulations," Khatua said.

He said FMC will take initiatives to broad-base the participation of investors in the commodities market.

"Participation of actual users and hedgers is important for the healthy growth of the futures market. The criticism that the future's trade is solely driven by speculation is not correct. There is regulatory mechanism in place to keep speculation under check," he said.

He said there are various misconceptions about the utility of the futures markets and the role played by the commodity exchanges.

"There have been apprehensions in some sections that futures markets are responsible for price rise in some agri-commodities," he said.

He said the supply-demand gap is the primary reason for price rise and the futures markets are not prima facie responsible for it.

The FMC chairman pointed out that the government has already set up a high level committee under the chairmanship of Planning Commission member Abhijit Sen to address such apprehensions.