New Delhi: Government will put in place a combination of measures like offloading rice and wheat stocks to cool down prices in case of a below normal monsoon this year.
However, Finance Secretary Rajiv Mehrishi feels that food prices this year are expected to remain stable.
He also says that impact on a poor monsoon on production will depend not only on the quantum of rainfall but also on distribution over time and across states.
"A weak monsoon generally leads to low rural economic growth and spike in food commodities. However, this year food prices are expected to remain stable. There are reasons for this assessment," he told PTI in an interview.
He gave his assessment when asked about the meteorological department's projection of a below-normal monsoon and what steps the government would take to ensure that inflation remained under control.
"As done last year, government could offload stocks from its godowns, especially wheat and rice, to cool down the prices of food grains," the Finance Secretary said.
The other measures that could be taken are discouraging exports of food commodities like potato and onion, which face highest price volatility, along with import of shortage items like pulses and edible oils.
He said declining global commodity prices and a strong rupee have made imports less costly while exports would be discouraged to leave more commodities for the domestic market.
Mehrishi said the steps would be taken to address rural distress through programmes rather than price distorting measures.
This, he said, could be done through viable crop insurance scheme for the benefit of commerce and scaling up MNREGA scheme in distress areas and villages.
Mehrishi said that Indian economy is expected to expand at 8.5-9 percent over 10-15 year time frame once the structural issues hampering growth are addressed by the government.
"India has a growth potential close to 8.5 percent to 9 percent over the next 10-15 years... The short term growth may be lower on account of structural issues which we are tackling," he said.
Strong economic growth, he added, is necessary for solving many socio-economic problems facing the country.
"India's growth is expected to be at least 8 percent in the current fiscal on account of initiatives taken by the government to boost investment and growth," Mehrishi said.
The Economic Survey had projected a growth of 8.1 to 8.5 percent in the current financial year.
"Multilateral institutions also share our growth optimism. IMF has projected a growth of 7.5 percent for 2015-16. Other organisations also project the growth to be in the vicinity of 7.5 percent," he added.
As per the latest World Economic Outlook of the International Monetary Fund (IMF), India will surpass China in terms of growth to become the fastest growing large economy in the world.
IMF expects India to grow at 7.5 percent in both 2015 and 2016, while China's growth rate has been projected at 6.8 percent and 6.3 percent respectively.
"Though the recovery in advanced economies is slow, the external environment for India is benign," Mehrishi said.
The government has taken various initiatives to deal with the structural issues like going in for auction of key infrastructure inputs such as coal and spectrum, setting up of the MUDRA Bank and streamlining the norms for foreign direct investment (FDI).