No instant solution to curb food inflation: Pranab

Amid rising food prices hitting the household budget, Finance Minister Pranab Mukherjee today said he has no "instant solution" to the problem.

"Unlike instant coffee, there is no instant solution to such vexed problem as inflation," he told reporters when asked about the steps being taken by the government to check food inflation which almost touched 20 per cent during the third week of December.

Discounting the possibility of excess liquidity pushing up inflation, Mukherjee said liquidity is not responsible for the current inflationary pressure.

"I had a detailed discussion with the Reserve Bank of India (RBI) and found that there is no reason to believe that excess liquidity is contributing to inflation in the economy," the minister said.

These comments come in the backdrop of wide speculation that the apex bank will adopt policy measures to suck liquidity out of the system.

The RBI will take a view on revising the key policy rates and ratios in its third quarter monetary policy on January 29.

Driven by increasing prices of potatoes, onion and pulses food inflation rose 19.83 per cent for the week ended December 19 after easing a bit in the previous week.

The government has decided to release more wheat to deal with rising prices, Mukherjee said, without providing more details.

Shortage of crops on account of drought and floods, and rising minimum support prices, he said, have been contributing to rising prices.