Blaming the inflation on the supply bottleneck, Finance Minister Pranab Mukherjee has said prices of food grains are expected to come down after the rabi harvest.
“The inflation is due to non-availability of certain commodities. The supply bottleneck is one of the reasons,” Mr. Mukherjee told PTI here on Saturday night.
“We are taking steps. After the rabi harvest, the prices of food items should come down,” he said.
Mr. Mukherjee said that the country needed 18 million tonnes of pulses while production was only 14 million tonnes. “There is a shortfall of 4 million tonnes and we have to import it.”
“Very few countries produce pulses and the international prices are also high. The same is the case with sugar. There is a shortfall of about 90 lakh tonnes,” Mr. Mukherjee said, adding that the country has to import about 20 lakh tonnes of edible oil.
Stating that the international price of sugar has come down of late because of a Brazilian product in the market, he said it price might ease a little.
Inflation zoomed towards the double-digit mark at 9.89 per cent in February, the highest in 16 months, driven mainly by rising prices of essential food items and the hike in excise duty on fuel announced in the Budget.
The wholesale-price based food inflation for the week ended March 20 was at 16.35 per cent due to higher prices of milk and pulses.
As for other food grains, Mr. Mukherjee said arrangements have been made for importing requisite quantities.
“We are trying to improve the supply,” he said, referring to the lifting of the import duty on rice.
On the steps taking to control inflation, Mr. Mukherjee pointed to the increase in cash reserve ratio announced by the RBI.
Ruling out rolling back fuel prices, he said, “There is no question of rolling back the prices. I have explained it in Parliament that I have not imposed any new taxes.”
“When the crude oil prices went as high as $127 per barrel, this (duty) was relaxed. Naturally, when the price has come down to $67 per barrel, I find there is no justification for continuing the relief,” he said, asserting that the increase in the customs duty of crude oil to 5 per cent “was in operation before”.
In his budget, Mr. Mukherjee restored the basic customs duty of 5 per cent on crude, 7.5 per cent on diesel and petrol and 10 per cent on other refined products.
He said, “The excise duty of Re 1 per litre of petrol and diesel also has the same explanation. It is not a new tax. So there is no question of roll back as of now.”
On the Women’s Reservation Bill, Mr. Mukherjee refused to comment on any possible dilution ahead of Monday’s crucial all-party meet to discuss the Bill.
“I cannot comment on it now,” he said. “Let us wait for the outcome of the all-party meet.”
