FM seeks CMs' help to rein in inflation

In a bid to bring down the prices of food items, Finance Minister Pranab Mukherjee has written to all state chief ministers, seeking their help in controlling inflation and cracking down on hoarders for removing hurdles in food supply.

He asked the states to immediately address the issue of supply of food and look into the local factors widening the gap between the wholesale and retail prices. This comes a day after food inflation touched a high of 18.32 per cent for the week ending December 25. “The finance minister has urged all the state governments to ensure that all bottlenecks in the supply chain are removed at the earliest and availability of the items that are driving the current round of food inflation in the economy, is improved, so that food prices can be brought down quickly,” the finance ministry said in a press statement today. Drawing attention of the state governments to the build-up in food inflation in the last few weeks, Mukherjee, in his letter, said much of this has been due to a significant increase in the prices of a few primary items like fruits and vegetables, milk, meat, poultry, eggs and fish.

Inflation data released on Thursday showed three-fourth of food inflation was due to rising prices of vegetables, while nearly one-fourth was due to milk prices. In the current financial year, the prices of cereals and pulses have declined and continued to do so even in the recent weeks when the trend in food inflation has reversed. “While there are some weather-induced supply constraints on some of the items currently exhibiting high inflation, which goes against the seasonal decline in prices normally seen at this time of the year, a larger part of price rise is due to the widening gap between wholesale and retail prices and the growing demand for these products due to rising income levels,” Mukherjee wrote.