Govt says will take more steps to contain inflation

Last Updated: Sunday, May 22, 2011 - 22:04

New Delhi: Admitting that high prices of
food and fuel remain a concern, the government on Sunday said it
will seek to contain food inflation through measures for
improving productivity of various agriculture products.

In its annual `Report to the People`, the UPA government
on Sunday said that it would also seek to minimise the impact of
high fuel prices on `poor and vulnerable` of the society.

In the report card, Prime Minister Manmohan Singh said
that the government has taken steps to increase productivity
and production of various agriculture commodities to contain
inflation and intends to take more steps in the future.

"Food inflation was a major concern in 2010-11," Singh,
said, while adding that various measures were taken by the
government to address the problem.

He listed out steps like a selective ban on exports and
future trading in foodgrains, zero import duty on select food
items, import of pulses and sugar by public sector firms,
distribution of important pulses and edible oils through PDS
and release of higher quota of non-levy sugar.

He added that fiscal stimulus was being rolled back and
RBI had also taken steps to restrict excess liquidity.

"As a result, inflation in cereals and pulses declined
from 11.05 percent in April 2010 to 2.32 percent in March
2011," Singh said.

"However, the long term solution to the problem lies in
increasing productivity and production in a diverse range of
agriculture commodities. We continued our efforts in this
direction in 2010-11 and intend to do more in the future,"
Singh noted.

On price situation, the report card said that the overall
year-on-year WPI inflation fell significantly to 8.98 percent
in March 2011, from the peak of 11 percent in April 2010.

"Several measures announced in the 2011-12 budget to
improve supply in the medium-term are expected to address the
imbalances in the agriculture sector. Fuel prices, however,
remain high, reflecting global trends," it added.

The government said that food price inflation still
remained a major concern. Although the prices of some cereals,
sugar and pulses declined over the year, the prices of protein
sources such as milk, eggs, meat and fish continue to remain
high reflecting structural demand-supply imbalances, it added.

In order to contain food inflation, states were also
empowered to act against hoarders of food items, in addition
to steps taken by the central government and RBI, it added.

The government said that fuel inflation also remained
high during the year, but it was committed to ensuring
availability of cooking fuels to the common man at affordable
prices.

While prices of petrol and diesel will be market
determined, the overall impact on the poor and the vulnerable
was being minimised, it said.

PTI



First Published: Sunday, May 22, 2011 - 22:04

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