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Montek: inflation can't be crash-halted

Staff Reporter
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CONCERNS: B.K. Chandrashekar, former Minister, greets Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, in Bangalore on Saturday. — PHOTO: V. SREENIVASA MURTHY
CONCERNS: B.K. Chandrashekar, former Minister, greets Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, in Bangalore on Saturday. — PHOTO: V. SREENIVASA MURTHY

Deputy Chairman of Planning Commission Montek Singh Ahluwalia has said that only production-oriented solutions can solve India's food problems.

Reiterating the Centre's claim that inflation in wholesale food prices will be reined in to “a comfortable 6 per cent” by the end of 2010, he said: “Inflation cannot be brought to a crashing halt.” He ruled out the possibility of any immediate steps to tackle food price inflation in the country. Political pressure had been mounting on the Centre to address this issue.

Focus on agriculture

Mr. Ahluwalia, speaking at an interactive session on inclusive growth and food security here on Saturday, said the Planning Commission's ongoing mid-term appraisal of the 11th Plan would shift focus to agriculture to tackle these issues. “I am sure that the Reserve Bank of India can bring inflation to a halt but it will lead to collateral damage in other sectors. People must understand that.”

The only way to solve issues related to a global phenomenon like price rise is to ensure the poor can afford the higher price of food, he said. This, he said, required “continuously increasing incomes” and a stronger public distribution system. For this, he favoured the use of a smart card-based system for those below the poverty line. Dismissing the direct cash transfer system that was followed in several developing countries, he said a smart card useable on any food item at a fair price shop would be the “perfect solution”. “This would introduce tremendous efficiency and contain stealing [leakages].” Mr. Ahluwalia said the unique identification project or “Aadhar” would be ideal for this because it would ensure that a person did not hold more than one card.

Issues of targeting, of course, would have to be addressed at the State government level. Rejecting the idea of a universal PDS, he said that “providing cheap food to all universally is not in farmers' interests.”

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