JOIN USTaming stubborn food inflation will be the top priority of the new BJP-led government with recourse to enhancing supply side measures.
This was emphasised by President Pranab Mukherjee in his first address to the joint sitting of Parliament after elections as also by Finance Minister Arun Jaitley, who said special courts will be put in place to stop hoarding and black marketing.
“Containing food inflation will be the topmost priority for my government. There would be an emphasis on improving supply-side…. It will also reform the public distribution system,” the President said.
India has been battling a prolonged spell of high inflation and low growth.
While economic growth has almost halved to below 5 per cent for the past two years, retail inflation has been averaging around 10 percent.
A major chunk of retail inflation is dominated by food articles.
The President also said that India was passing through an extremely difficult phase with the GDP growth falling to less than five per cent for two consecutive years.
Mukherjee said the government was alert to the possibility of below-normal monsoon and was already already preparing contingency plans in case there was a poor monsoon.
The Meteorological Department has forecast an El-Nino induced below-normal monsoon this year.
Breaking the vicious cycle
In a pre-budget meeting with his state counterparts, Finance Minister Arun Jaitley echoed similar sentiments saying, long inflationary trends have adversely impacted the food and nutritional security of the common man. He sought states’ support in tackling inflation.
“We are committed to breaking this vicious cycle of high inflation and high interest rates. While, we look forward to your support in tackling temporary fluctuation in prices, we also would like to evolve a mechanism which addresses the structural issues that create supply bottlenecks,” he said at the meeting of state finance ministers.
Jaitley said, his government would put in place strict measures and special courts to stop hoarding and black marketing.
The need for a Single Agriculture Market and real time information dissemination on prices to farmers and consumers were areas which needed to be addressed, he said.
Mukherjee too said the government was committed to reviving the agricultural sector with substantial investment made for rural asset creation.