New Delhi:
Under pressure over rising prices, Prime Minister Manmohan Singh held a Chief Ministers' meeting in the Capital on Saturday.
The Prime Minister has formed a panel, including Central Ministers and Chief Ministers, in a bid to arrest the spiral. The group will mainly explore ways to increase agricultural production, and reduce retail price of essential commodities.
Addressing the meeting, the Prime Minister said food prices will stabilise soon; but put the onus on states to do more to control prices. "The worst is over as far as food inflation is concerned. I am confident that we will soon be able to stabilise food prices. Food prices have softened in recent weeks and I expect this to continue," he said.
In a stern warning to hoarders, the Prime Minister said powers under the Essential Commodities Act would be used against them to stop artificial scarcity.
Driven by rising prices of essential food items like pulses and vegetables, food inflation touched a decade high of nearly 20 per cent in December before moderating a little bit
in January.
The Prime Minister said that good crop prospects and increasing linkages between the domestic and global food prices would help in stabilising the food inflation.
Thanking Food and Agriculture Minister Sharad Pawar, who has been under attack both by the Opposition, allies and a section of Congress, for convening the conference, Singh said, "We are all very concerned about the distress that the sharp rise in food prices has caused to the common man."
The Prime Minister also made a strong case for opening of retail trade for greater competition pointing out that there was a huge difference between the wholesale and retail prices.
Under the current dispensation, only domestic business houses are allowed to enter the retail sector. The government has not taken a view on opening retail trade to foreign direct investment (FDI), though overseas companies are permitted in wholesale trade.
"We need greater competition and therefore need to take a firm view on opening up the retail trade," he said.
Expressing concern over multiple state and local taxes and levies, he said they collectively increase the cost of essential commodities by 10 to 15 per cent. "This too needs to be addressed," he added.
Referring to the spiralling prices of pulses, the Prime Minister said, the government would soon launch a National Mission on Pulses to address the supply shortage.
Domestic production of pulses has stagnated over the past several years, he said, adding the government had imported yellow peas, a substitute for domestically grown pulses, to augment supplies.
On sugar, the Prime Minister said the government had allowed import of raw and refined sugar at zero duty to meet the production shortfall.
"We must expedite the processing of imported raw sugar and remove all impediments that come in the way," he said, pointing that the country needs a medium-term policy framework to address the periodic scarcity of sugar.
Expressing concern over the lacklustre response of the state governments in dealing with the price situation, the Prime Minister said, "I regret to say ...that lifting of wheat and rice by the state governments under the OMSS has not been encouraging in most states."
To augment the supply of cereals, the Centre under the Open Market Sale Scheme (OMSS) had released 30 lakh tonnes of wheat and rice to the States for sale to retail consumers.
However, the response of the States to the OMSS has been lukewarm.
Attributing high prices of food items to factors like rising global prices and monsoon failure, Singh said, "while we did well to protect incomes, we have been less successful on the price front."
The government, he added, provided subsidised diesel and seeds to farmers to deal with rain shortfall and also allowed duty free import of food items while imposing restrictions on their exports.
On the back of adequate food stock and good rabi (winter crop) prospects, the Prime Minister expressed hope that food prices would moderate.
"All this augurs well for our ability to stabilise food prices at a reasonable level," he added.
But the Chief Ministers have gone on the offensive blaming the Centre squarely for rising food prices.
While Gujarat Chief Minister Narendra Modi pointed out that such a meeting should have been called earlier, his Chhattisgarh counterpart Raman Singh said the Centre should have strengthened the public distribution system.
Even Maharashtra Chief Minister Ashok Chavan laid the onus on the Centre, asking for more subsidies on essential commodities.
The Kerala CM also said the price rise was mainly a failure of the Centre.
(With PTI inputs)
The Prime Minister has formed a panel, including Central Ministers and Chief Ministers, in a bid to arrest the spiral. The group will mainly explore ways to increase agricultural production, and reduce retail price of essential commodities.
Addressing the meeting, the Prime Minister said food prices will stabilise soon; but put the onus on states to do more to control prices. "The worst is over as far as food inflation is concerned. I am confident that we will soon be able to stabilise food prices. Food prices have softened in recent weeks and I expect this to continue," he said.
In a stern warning to hoarders, the Prime Minister said powers under the Essential Commodities Act would be used against them to stop artificial scarcity.
Driven by rising prices of essential food items like pulses and vegetables, food inflation touched a decade high of nearly 20 per cent in December before moderating a little bit
in January.
The Prime Minister said that good crop prospects and increasing linkages between the domestic and global food prices would help in stabilising the food inflation.
Thanking Food and Agriculture Minister Sharad Pawar, who has been under attack both by the Opposition, allies and a section of Congress, for convening the conference, Singh said, "We are all very concerned about the distress that the sharp rise in food prices has caused to the common man."
The Prime Minister also made a strong case for opening of retail trade for greater competition pointing out that there was a huge difference between the wholesale and retail prices.
Under the current dispensation, only domestic business houses are allowed to enter the retail sector. The government has not taken a view on opening retail trade to foreign direct investment (FDI), though overseas companies are permitted in wholesale trade.
"We need greater competition and therefore need to take a firm view on opening up the retail trade," he said.
Expressing concern over multiple state and local taxes and levies, he said they collectively increase the cost of essential commodities by 10 to 15 per cent. "This too needs to be addressed," he added.
Referring to the spiralling prices of pulses, the Prime Minister said, the government would soon launch a National Mission on Pulses to address the supply shortage.
Domestic production of pulses has stagnated over the past several years, he said, adding the government had imported yellow peas, a substitute for domestically grown pulses, to augment supplies.
On sugar, the Prime Minister said the government had allowed import of raw and refined sugar at zero duty to meet the production shortfall.
"We must expedite the processing of imported raw sugar and remove all impediments that come in the way," he said, pointing that the country needs a medium-term policy framework to address the periodic scarcity of sugar.
Expressing concern over the lacklustre response of the state governments in dealing with the price situation, the Prime Minister said, "I regret to say ...that lifting of wheat and rice by the state governments under the OMSS has not been encouraging in most states."
To augment the supply of cereals, the Centre under the Open Market Sale Scheme (OMSS) had released 30 lakh tonnes of wheat and rice to the States for sale to retail consumers.
However, the response of the States to the OMSS has been lukewarm.
Attributing high prices of food items to factors like rising global prices and monsoon failure, Singh said, "while we did well to protect incomes, we have been less successful on the price front."
The government, he added, provided subsidised diesel and seeds to farmers to deal with rain shortfall and also allowed duty free import of food items while imposing restrictions on their exports.
On the back of adequate food stock and good rabi (winter crop) prospects, the Prime Minister expressed hope that food prices would moderate.
"All this augurs well for our ability to stabilise food prices at a reasonable level," he added.
But the Chief Ministers have gone on the offensive blaming the Centre squarely for rising food prices.
While Gujarat Chief Minister Narendra Modi pointed out that such a meeting should have been called earlier, his Chhattisgarh counterpart Raman Singh said the Centre should have strengthened the public distribution system.
Even Maharashtra Chief Minister Ashok Chavan laid the onus on the Centre, asking for more subsidies on essential commodities.
The Kerala CM also said the price rise was mainly a failure of the Centre.
(With PTI inputs)
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