Economic Survey 2009-10: Food management policies poor

Agriculture minister Sharad Pawar should take note: warning that overall prices would rise further in the next few months, the economic survey partly blamed poor food management policies for double-digit food inflation.

"Since December 2009 there have been signs of these high food prices, together with the gradual hardening of non-administered fuel products prices, getting transmitted to other non-food items, thus creating some concerns about higher-than-anticipated generalised inflation over the next few months," the survey said.

On a year-on-year basis, wholesale prices-based inflation in December 2009 was 7.3 per cent, while food inflation was 19.77 per cent. Higher food prices were mainly because of supply-side constraints, compounded by poor monsoons in 2009, it said.

"In the case of sugar, delay in market release of imported raw sugar may have contributed to the overall uncertainty, thereby allowing prices to rise to unacceptably high levels in recent months," the survey said.

It, however, observed that food prices may have reached their peak in December last year and are expected to moderate and also stabilise on account of the likely impact of several measures taken by the government to contain price rise in recent months.

The government has taken a number of short-term and medium term measures to improve domestic availability of essential commodities and moderate inflation, it said. As part of fiscal measures, the government reduced import duties to zero for rice, wheat, pulses, edible oils and sugar.