Terming as “counter productive” the proposed transaction tax on commodity trading, exchanges, regulator and brokers on Friday hit out at Finance Minister P Chidambaram saying the move will kill the futures markets. “CTT will have an adverse impact on the futures markets. It would virtually kill the growth story of 23 commodity exchanges in the country,” FMC Chairman B P Khatua said.

“Introducing CTT on a four year old commodity market, which is just one sixth of the size of stock market on par with STT is not fair,” he said, adding this might encourage investors to get into grey market. The FM  proposed Commodity Transaction Tax on the same line of securities transaction tax on options and futures. National Commodities and Derivatives Exchange CEO & MD P H Ravikumar said, “CTT is likely to bring down the investors participation in the exchanges.” MCX’s Deputy MD Joseph Massey said, “Imposition of CTT will make the commodity market inefficient as commodities are global product and users are sensitive to cost of trading.” 

Brokerage firm SMC Global VP Rajesh Jain said, “Introduction of CTT is a negative stance, which could affect strong investors’ interest in commodities trading.” Market regulator said bringing CTT on options, before it is launched would discourage growth of option trading.