Mukherjee says inflation not due to food shortage

MUMBAI - Finance Minister Pranab Mukherjee has said inflation is not due to food shortage.

Mukherjee said the price rise was mainly due to the demand pressure of edible oils, pulses and sugar.

“If you look at the basket of the wholesale prices till date you will find the contribution of other elements are not that high as the contribution of the food items. It reached as high as 19.9 percent, gradually it is coming down, and substantially it is because of the short supply, there is a gap between the demand and supply in edible oils, in pulses, in sugar,” said Mukherjee, addressing reporters here on the sidelines of an event to mark the 75th anniversary of the Reserve Bank of India (RBI).

Mukherjee gave assurances about abundant food stock in the country.

“There is no shortage of the food stock. Already about four million tonnes of grains, three million tonnes of wheat, two million tonnes for open sale market scheme, one million tonne for vast consumers and one million tonne of rice have been given to the states for the open market sales schemes,” he said.

The government, facing mounting criticism for rising food prices, is struggling to meet conflicting aims of controlling food inflation and trying to please farmers by paying them attractive prices.

Prime Minister Manmohan Singh said on Friday that the winter-sown crop prospects were “very encouraging”, but the country needs to pay farmers a good price for their produce to boost output further.

A good harvest is likely to bring down food inflation, which accelerated to nearly 18 percent in late February from a year ago, and also put pressure on the government to export wheat and rice as official agencies do not have enough storage space. (ANI)