Published: Friday, Jan 7, 2011, 0:13 IST
By Harish Gupta | Place: New Delhi | Agency: DNA
http://www.dnaindia.com/india/report_worried-manmohan-singh-asks-sharad-pawar-pranab-mukherjee-to-check-food-inflation_1491268
The surging food inflation has triggered concern in the Union government. A worried Prime Minister (PM) Manmohan Singh has asked Union finance minister Pranab Mukherjee and agriculture & food minister Sharad Pawar to evolve “short- and long-term” measures to keep the trend in check.
The issue was not taken up at Thursday’s cabinet meeting but the PM asked senior ministers separately to chalk out a strategy to bring down prices. The PMO also downplayed concerns expressed by Union home minister P Chidambaram publicly in this regard. Chidambaram, who was the finance minister during UPA-I, had expressed doubts on Wednesday whether the government had adequate policy tools to tame prices, which erode real family income.
“…Not sure whether we understand all the factors that contribute to price rise. Nor am I sure whether we have at our hand all the tools to control inflation,” he had said, adding “there is no tax worse than inflation”.
The PM, already under great pressure from the opposition over allegations of corruption against his ministerial colleagues, may find himself in more trouble if prices keep galloping. Senior ministers Mukherjee and Pawar have already expressed their inability to contain the trend.
Pawar has already expressed interest to relinquish the responsibility of the ministry of food and consumer affairs. The PM may consider it seriously now. However, the move might have its own pitfalls. Pawar, in a confidential report to the PMO, has listed various reasons for high food prices and the difficulties being faced by his ministry.
Apart from global factors which are leading to rise in prices of oil seeds, oil cakes and other commodities, the key factor is growing consumption of milk, milk products and other food items in rural India itself due to rising level of prosperity. The high minimum support price to farmers also has caused some distortion.
Besides, a large number of private companies have been buying agricultural produce and milk products in a big way. The only option in this scenario is to prevent hoarding and import to meet the demand. Therefore, a change of guard at Krishi Bhawan alone may not suffice.
The PM is understood to have decided to summon a high-level meeting to discuss the issue next week.
