Offering no respite to the common man and thereby adding to the government's worries, food inflation marched up yet again to 8.74 per cent for the week ended April 9 from its 18-month low of 8.28 per cent in the previous week even as Prime Minister Manmohan Singh expressed concern over the unabated price spiral and stressed the need for enhancing food security. With the release of the Wholesale Price Index (WPI) based inflation data on primary articles on Thursday coinciding with the full meeting of the Planning Commission to finalise the growth target for the XII Plan (2012-17), the upward swing in food prices came as a dampener for the government especially when efforts are on to rein in the price spiral without hurting growth.
Expressing the government's dilemma over how to maintain the growth momentum while containing inflation, especially in food items, Dr. Singh said: “We have to make a concerted effort to enhance our food security ... during the past year and a half, persistent inflation, especially in the food sector, has become a cause of concern …The needs of a growing and increasingly more prosperous population can only be met by enhanced production of a diversified basket of agricultural products.”
Evidently, there is a growing realisation that despite the government's consistent policy to control inflation, mere tinkering with monetary policy by way of hikes in key policy rates by the Reserve Bank of India — as has already been effected eight times since March 2010 — will not lead to easing of food prices as the basic reason for escalating prices is supply side constraints. The WPI data reveals that during the week, fruits turned dearer by 25.25 per cent on a yearly basis while protein-based edibles such as eggs, meat and fish were costlier by 14.96 per cent. Alongside, onion prices were also higher by 8.28 per cent.