Expressing concern at the distress caused to people by price rise, Prime Minister Manmohan Singh on Saturday said the worst was over on food inflation.

“With good crop prospects, remunerative prices being in place and Indian prices broadly in line with international prices, we will soon be able to stabilise food prices,” he said at a conference of Chief Ministers here.

“This is not the first time that we are facing high rates of inflation of food articles. We had a similar upsurge in 1998. Food prices are subject to cyclical bursts of inflations and we must work together to bring them under reasonable control.”

Dr. Singh said high prices caused by a shortfall in output could be handled only by augmenting supply either through a drawdown of available stocks or through imports. “As far as imports are concerned, we are freely allowing imports of those food articles whose prices have been under pressure. We have also discouraged or completely banned the export of these items.”

Turning to the “vital role of State governments in managing inflation,” he said they must use their powers under the Essential Commodities Act to prevent artificial scarcity and intervene in the market whenever required.

Retail trade

At the same time, the Prime Minister underscored the need to look at opening up retail trade. There was a wide difference between the retail and farm gate prices. “We need greater competition and therefore, need to take a firm view on opening retail trade.”

He urged the States to gear themselves up for rabi (winter) crops and also plan the kharif (summer) production in 2010.

Expecting the economy to grow by 7.5 per cent this year, Dr. Singh expressed happiness that the government maintained a growth rate of 6.7 per cent in the first year of the global crisis in 2008-09 and was able to protect the “inclusiveness” of the growth rate to a large extent.

Mission on pulses

Enumerating the steps taken to control prices, the Prime Minister admitted that the prices of pulses had risen sharply, mostly due to supply constraints. To address the issue, a National Mission on Pulses was being set up. The imported yellow peas could be a substitute for traditional pulses.

Urging the States to remove all impediments to processing imported raw sugar to augment availability, he asked them to assess the role of the State advised prices for sugarcane in the high prices of sugar.

Union Agriculture and Food Minister Sharad Pawar urged the States to cooperate and coordinate with the Centre to fight the “battle against rising prices,” both as a short-term and long-term strategy.

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