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Updated: February 6, 2010 23:12 IST

Core group to be set up for tackling price rise

Gargi Parsai
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PRICE PRESSURE: Prime Minister Manmohan Singh at the Conference of Chief Ministers on Prices of Essential Commodities at Vigyan Bhawan in New Delhi on Saturday.
PRICE PRESSURE: Prime Minister Manmohan Singh at the Conference of Chief Ministers on Prices of Essential Commodities at Vigyan Bhawan in New Delhi on Saturday.

The government on Saturday decided to set up a high-profile Standing Core Group to suggest measures to deal with price rise and propose steps for improving public distribution system, procurement of foodgrains and production of agriculture produce.

The Group will comprise the Union Finance Minister, the Union Agriculture Minister, Chief Ministers of Andhra Pradesh, Assam, Punjab, Haryana, Bihar, West Bengal, Gujarat, Madhya Pradesh, Chhattisgarh and Tamil Nadu; Deputy Chairman of Planning Commission and the Chairman of Prime Minister’s Economic Advisory Council.

The decision to set up such a group was taken at the Chief Ministers’ Conference here on Price Rise convened by Prime Minister Manmohan Singh. The meeting was attended by 24 Chief Ministers and about nine Governors and administrators.

The Group will suggest measures for increasing agricultural production and productivity including long-term policies for sustained agricultural growth; to reduce the gap between farm gate prices and retail prices and for better implementation of and amendment of the Essential Commodities Act.

The group will deliberate upon steps for better and effective delivery of essential commodities to the vulnerable sections of society and suggest strategy for augmentation of warehousing and storage capacity (including cold chains) and issues relating to farm inputs such as seeds and fertilizers.

The formation of the committee was apparently in response to some of the participating Chief Ministers’ demand that the Centre must consult them while evolving short-term and long-term measures on price rise and food security.


The conference identified reasons for price rise as rise in the minimum support price for farm produce, supply constraints in some commodities, increase in international prices, increase in demand “due to increase in purchasing power,” more liquidity in the system and “inefficiencies” in marketing of farm produce and the high cost of intermediation.

The conference advocated a “paradigm shift” by bringing agriculture back to the centre of the [country’s] agenda. It highlighted the role of the States by dovetailing local schemes with the Central projects and by strategising for the next agricultural revolution.

It recognised that the prime concern of the government was the insulation of the poor and the vulnerable from adverse price movements. It agreed that the wide gap between the crop yields obtained in frontline demonstrations on farmers’ fields and the average yields, as well as inter-State variations in productivity could be bridged by proper implementation and monitoring of the Central and State schemes.

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