Hoarding, hike in procurement pushed up food inflation: Pranab

December 24th, 2009 - 10:25 pm ICT by IANS  

Pranab Mukherjee Kolkata, Dec 24 (IANS) Union Finance Minister Pranab Mukherjee Thursday said hoarding and other “cost-push elements” and the hike in procurement prices of food items like sugar, paddy and wheat have played a key role in the high food inflation.
He emphasized that state governments should take effective steps against hoarding of food items in a bid to tackle the cost-push elements.

“For wheat, the procurement prices have been raised by Rs.450 a quintal and Rs.400 for paddy; add stocking, mandi and bank interest charges then you can imagine where the prices would reach,” Mukherjee said at the annual general meeting of Bharat Chamber of Commerce here.

The finance minister said the annual shortage of 5-6 million tonnes of pulses is not being met despite efforts by the government to open up import of pulses as the international prices are ruling high.

“Traders are not importing pulses as international prices are ruling high,” he said.

Speaking of the projected gross domestic product (GDP) growth rate of 7.75 percent for 2009-10, Mukherjee said the estimate is “on the higher side and a little optimistic”.

He said for fiscal consolidation, rationalisation of subsidy and expanding the revenue base of the government is required.

“I am talking to the fertiliser ministry to rationalise the subsidy so that the benefit can be directed to the farmers,” Mukherjee said.

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