India Eco Summit: 'Food inflation to ease by fiscal-end'

Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the food price inflation would come down by the end of the current fiscal.

"Food price inflation by the end of the current fiscal would be significantly lower than what it is right now," Ahluwalia said while speaking at the India Economic Summit here.

Citing the reason for high food inflation, he said, at the end of a bad monsoon, particularly at this point of time the pressure is on vegetables.

Prices of vegetable are expected to ease in the coming months, he added.

For the week ended October 24, food inflation shot up by 13.39 per cent primarily on rising prices of potatoes and onions.

The prices of potatoes have doubled on annual basis while onions have become dearer by 50 per cent during the year.

Drawing confidence from comfortable food stock, Ahluwalia said, "We are in a strong position as far as stocks (of foodgain) are concerned, so we don’t have to worry on that score. I think that by December or January, at least with regard to vegetables, you will see a very different position."

On winding down of stimulus packages announced in the wake of global meltdown, the Planning Commission Deputy Chairman said, "Every authority in India has said that we are quite happy with the policy balance as far as stimulus, fiscal and monetary balance is concerned for the current fiscal."

Without specifying the time line for exit, he said, "We definitely feel that at the start of the year (2010) we should bring our perception that things have gone well, recovery is taking place and we are going to do something."

"We ought to think next year and what pace the withdrawal of stimulus should begin. That’s not to say that definitely we are going to do X or Y," he added.