High food inflation worries Centre

The Centre today expressed concern over high food inflation, which is nearing 20 per cent, and asked states to lift more wheat and rice stocks from its pool — a move that will help increase foodgrain availability and eventually ease prices.

In a pre-Budget interaction with states finance ministers, Union Finance Minister Pranab Mukherjee pointed out that there was enough wheat and rice stocks and proposed open market sale for offloading of these stocks.

"A major area of concern is high food inflation; WPI index increased by 19.79 per cent, therefore collaborative efforts of the central and state governments are required to tackle this problem... Offtake of surplus stock by the state governments are not satisfactory. Therefore, all the state governments may cooperate in this regard to lift these surplus stock alloted to them," Mukherjee said at the meeting.

He also called for efforts to increase farm productivity.

Mukherjee said that economic recovery will be a collaborative effort of the centre and the states.

Economic growth stood at 7 per cent during the first half of the current fiscal, Mukherjee said pegging GDP growth for the whole fiscal at around 7.75 per cent, which exceeds the initial estimates of the government as well as the RBI.

The Union Finance Minister asked the state governments to utilise the cash surplus for development activities.