CII calls for critical distribution reforms in agriculture

Confederation of Indian Industry (CII) president Chandrajit Banerjee has called for critical distribution reforms in the agriculture sector to ensure a further decline in inflation.

He said that the CII has taken note of the decline in inflation to a five month low of 6.16 per cent in December 2013 from 7.52 per cent during the previous month on the back of a sharp drop in food prices.

"The good news is that the prices of cereals, fruits and vegetables, onions, eggs are trending downward after being on the ascendant for long. Going forward, the good harvest should further help contain food prices. Besides, manufacturing prices are reasonably stable indicating that core inflation is within range," Banerjee said.

"The easing of inflation at a time when industrial growth continues to be in the red should induce RBI to review its monetary policy stance and cut its policy rates to rejuvenate growth, which has been hit by high interest costs, flagging investments and subdued demand," he added.

To ensure that the easing of food prices is a sustained phenomenon, CII maintains that there is need for critical distribution reforms in agriculture and taking perishables out of APMC to improve the agriculture supply chain logistics and enable better price discovery, Banerjee said.

Further, there is need for a clear plan and a strategy for using India's excess stock of food and vegetables, much of which goes waste every year, he added.