Montek for higher imports, effective PDS to tame food prices

Concerned over rising food prices, Planning Commission Deputy Chairman Montek Singh Ahluwalia today pitched for increasing supplies through imports and better use of the public distribution system.

"We are very concerned about that (high food prices) and we need to ensure through measures to increase supplies... supplementing domestic supplies by imports wherever possible and through better effective functioning of PDS," he told reporters here.

On the overall inflation rate, Ahluwalia hoped it would remain within the comfortable 5 per cent level as the drought situation is not as grim as was anticipated.

Pointing out that food prices are higher than they should be, he said, "The drought is not as bad as was once thought. So speculative pressure, which may have let to somewhat higher prices will slowly begin to ease."

The general inflation turning positive after remaining in the negative for about 13 weeks was not a problem, he said, adding "it is well below the comfort level...It will remain within the comfort level during this financial year."

Although the Reserve Bank expects the inflation to touch 5 per cent by the end of the current fiscal, several other think tanks have warned that it might climb to around 8 per cent by March 2010.