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If all is wrong with India, how come it's been around 5000 years? ©

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Dec 23, 2003
The less known boom at NMCE

It has been famously said that the power of information lies in the dis-intermediation it begets. High profile industries like travel, services, retailing and stock exchanges have seen several intermediate tiers fall away.

But what about the amorphous agrarian economy that keeps most of India’s billion people busy? You would say it’s an intractable eel and walk away. But the much mocked Indian administrative/political ‘system’ has gamely tried—and is succeeding. Minds without names have conjured up savvy solutions that are working.

For over a year now, the National Multi Commodity Exchange ( NMCE ) has been running an online trading system for commodity futures. So far rubber, spices, oil seeds, metals etc. have been traded and in the last couple of months rice, wheat and bullion have been added. The total is 51. In just one year the business has grown to over Rs.5000 crores.

NMCE has pioneered many innovations that threaten ‘bucket shops’ linked to run exploitation cartels. NMCE’s transparent system is built on inviolable contracts that require verified delivery receipts at recognised warehouses. Futures and derivatives trading at NMCE enable a farmer to know the opportunities --or disincentives-- that await him in the future.  NMCE’s structure --’demutualised’-- ensures that there is no conflict of interest between those that own it, manage it and use it.

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