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LATEST NEWS UPDATES | Meet on inflation remains ‘inconclusive' by Gargi Parsai

Meet on inflation remains ‘inconclusive' by Gargi Parsai

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published Published on Jan 11, 2011   modified Modified on Jan 11, 2011

Export of sugar, hike in Above Poverty Line price under Public Distribution System put on hold

A meeting convened by Prime Minister Manmohan Singh on Tuesday to discuss inflation and ways to tackle it, particularly the zooming prices of onion, vegetables, fruits, eggs and milk, remained “inconclusive,” official sources said. The Ministers concerned will meet Dr. Singh again in a day or two to come up with measures to tackle food inflation that soared to 18.32 per cent for the week ended December 25.

For starters, the decision to export 5 lakh tonnes of sugar will be “reconsidered” by the Empowered Group of Ministers, headed by Union Finance Minister Pranab Mukherjee. The Food Ministry has assigned quota for 661 sugar mills for export on the back of high sugar output estimate this year.

Also, the decision to raise by 40 per cent the Central issue price of wheat and rice being sold to the Above Poverty Line (APL) beneficiaries through the Public Distribution System will be put on hold.

The Food Ministry's decision, approved last month by the Cabinet Committee on Economic Affairs which is chaired by the Prime Minister, has already been “minuted” and, therefore, is implementable. But it will now be put on hold.

Informed sources said the Prime Minister's Office made a presentation at the meeting on inflation, which is at 7.48 per cent, and the high food inflation on account of rise in prices of vegetables, onion, eggs, meat milk and edible oils.

The presentation gave an overview of inflation, both domestic and international, the increase in demand due to better consumption pattern in a growing population. It also highlighted the possible steps that could be initiated such as improving the supply side and augmenting availability to contain food inflation. The government has already banned export of rice, wheat, pulses and onions.

Role of States

The role of States in cracking down on hoarders despite massive protests by Delhi onion traders against income-tax raids on their premises on Tuesday was also highlighted. The traders have decided to go on an indefinite strike. This, after the Nashik onion traders called off their strike on Tuesday.

The 90-minute meeting was attended among others by Mr. Mukherjee, Agriculture and Food Minister Sharad Pawar, Home Minister P. Chidambaram and Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, Cabinet Secretary K.M. Chandrasekhar and Economic Adviser to the Finance Minister Kaushik Basu.

Meanwhile, the Congress said the meeting showed the government's “sensitivity” towards the issue, but put the onus on the States to check the prices.


The Hindu, 12 January, 2011, http://www.thehindu.com/todays-paper/tp-national/article1082211.ece


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