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Testing the Efficiency of Agriculture Commodities Market in India Prof Sanjay Sehgal Abhishek Singh Place of agriculture. Agriculture contributes about 22% to the GDP of the Indian economy. It employees around 57% of the labor force on a total of 163 million hectares of land. Institutional development, which improves the liquidity and efficiency of commodity markets, would impact upon a large fraction of India’s population. It imposes considerable direct costs upon the government, and has led to a suboptimal resource allocation. Tetable Hypothesis 1) The introduction of commodity future has increased spot market efficiency 2) Future prices are determined on the basis of cost of carry model DATA SOURCE Spot Prices :NCDEX Forward Prices :NCDEX Transportation cost: Warehousing Cost :CWC ,SWC Methodology Random walk test Serial correlation coefficient test Runs test Cost-of-carry Model Futures price = Spot Price + Carry Cost Forward pricing with transportation cost F = (S0 +U) e rT F = S0e(r+u)T Forward pricing with convenience Yield F = S0e(r+u-y)T