Bad monsoon to pose problems in taming inflation: PM

Deficient monsoon will pose some difficulty in controlling inflation, Prime Minister Manmohan Singh said on Wednesday.

New Delhi: Deficient monsoon will pose some difficulty in controlling inflation, Prime Minister Manmohan Singh said on Wednesday.

"... We must control inflation. This would pose some difficulty because of a bad monsoon this year," Singh said in his Independence Day address.

However, he said that the government has huge wheat and rice stocks and foodgrain supply is not a problem.

Although inflation moderated to 6.87 percent in July from 7.25 percent in June, food inflation was still ruling above 10 percent.

The price rise for food articles remain quite high affecting the budget of the common households. Prices of vegetables rose annually by 24 percent, egg, meat and fish by 16 percent and pulses by 28.26 percent in July.

The Prime Minister said the government has taken measures to deal with the deficient rainfall.

"Our effort is to ensure that people do not face difficulty due to shortage of seeds, fodder or water in any part of the country. It is good that we have a big stock of foodgrains ... And availability of foodgrains is not a problem for us," he said.

Monsoon, the life-line of Indian agriculture, has been deficient by 16 percent so far, affecting the sowing of Kharif crops, like paddy and coarse cereals. Karnataka, Maharashtra, Gujarat and Rajasthan are facing drought-like situation.

"...We have taken many measures to deal with the situation. In districts where there has been a deficit of 50 percent or more in the rainfall, diesel subsidy is being provided to farmers by the government. Seed subsidy has been enhanced. Funds available under the central scheme for fodder have been increased," the Prime Minister said.

Lauding the efforts of farmers, Singh said the country has achieved record foodgrains production during last two years, helping the agriculture sector to grow by 3.3 per cent during the 11th five year plan (2007-12) against 2.4 per cent in the previous plan period.

"In the last 8 years, we have doubled the support prices of crops. We are providing loans at low interest rates to lakhs of farmers," Singh said.

The country harvested record foodgrains (wheat, rice, pulses and coarse cereals) production at 257.44 million tonnes in the 2011-12 crop year (July-June). The government's godowns are overflowing with wheat and rice stocks, which stood at 76 million tonnes at the start of this month.

In the current 2012-13 crop year, the foodgrains output is likely to drop due to bad monsoon as the area under Kharif crops is down by about 9 per cent so far this year.

The fall of acreage under coarse cereals had fallen by a steep 20 per cent and in case of pulses by 17 per cent till August 9.

Kharif crops contributed a little over 50 per cent in the country's total foodgrains production in 2011-12.