Need to address supply constraints to check prices: FM

Amid concerns over rising cost of onions and other essential commodities, Finance Minister P Chidambaram today said unless supply side constraints are addressed consumer price inflation is not likely to fall.
"We have been able to contain core inflation to two per cent but consumer price inflation is high and I take that unless we address the supply side constraints consumer price inflation is not likely to fall," he said.
"I am not defending inflation. Our inflation is high, consumer price inflation is high. In the last 12 months, we have been able to moderate the wholesale price inflation below five per cent," he said.

Chidambaram said although the wholesale price-based inflation has come down to below five per cent in five months till June, efforts would have to be made to address the supply side problems to bring down the retail inflation.
He was responding to concerns voiced by members in Rajya Sabha over shooting prices of commodities like onions during a debate on the state of economy.
His comments came as onion prices soared up to Rs 80 per kg in major cities across the country due to lower supplies.

BJP Deputy leader Ravi Shankar Prasad, who initiated the debate, questioned, "Why the government is not able to stop the price rise when there is abundance (of foodgrains)?"

He alleged that there is gross mismanagement of food economy.
Latching on to the issue of rising onion prices, he said, "Onions are causing tears once again. Not the peels of onions, but the prices. It is being sold at 75-80 rupees...In India we are today in a situation where the prices of onions, a necessity, petrol, a convenience, and beer, a luxury are same. That is exactly the state of economy."
Anil Desai (Shiv Sena) took a dig at the government saying prices of essential commodities have risen so much that he was surprised to see the advertisement for sale of tyres with bags containing five kg onions free.

The members accused the government of failing to take remedial steps.