Heard of wheat returns? If not, soon you will. And it has nothing to do with what you get in return from wheat futures trade.
Like the Income-Tax department, the central government has made it mandatory for anyone who buys more than 50,000 tonnes wheat over the coming months to file a weekly return with the government. It practically means that purchases by all traders, retailers, biscuit and bread manufacturers, roller flour mills and branded atta (flour) companies will now be under the government's scanner.
Under Section 3 of the Essential Commodities Act, the food ministry has issued a new wheat stock declaration order.
According to this, from March 1, any company, firm or individual who cumulatively purchases 50,000 tonnes wheat in the 2007-08 rabi season will have to file a return with the government every Friday till May 31. After that, they have to file a return on the last Friday of every month till the end of this year.
Failure to do so may attract provisions of the tough Essential Commodities Act. Though the rabi marketing season begins officially on April 1, the crop has already started arriving in Gujarat and Madhya Pradesh.
If you think that the move is meant for big fish in the business, it is not. Even the small millers and traders would fall under the ambit of the notification. This is because even if a company/trader holds zero stocks at any point but has bought and sold more than 50,000 tonnes cumulatively over a period of time, the order makes it liable to file returns.
According to market sources, even if you buy just small quantities at one time, which does not need heavy investment, over the coming months, you will eventually cross the 50,000-tonne limit and then become liable to file return. So, the belief that only big players are being targeted is wrong.
There is widespread apprehension that companies may indulge in stocking and hoarding of wheat to encash higher prices later. About 15% of India's annual production is converted into wheat products.
Meanwhile, India may reap a bumper output of around 73 million tonnes this year due to good weather conditions, government officials said. The forecast is at least one million tonnes more than previous estimates and sharply up from the 2006 output of 69.4 million tonnes.
