Rural prosperity driving higher food consumption: Montek
21 Oct 2010
If the latest assertion from planning commission deputy chairman Montek Ahluwalia is anything to go by, rising prices might actually be a blessing in disguise. Ahluwalia said rural prosperity was driving higher food consumption.
At the same time, he shared is concerns over the price line saying that despite easing to 15.53 per cent as of 9 October, from 16.37 per cent a week ago food inflation was running ''high.''
''If rural income would go up, more people will be buying vegetables, then their prices would go up. (Food) inflation is not up because of grain prices, they are moderate. It is up because of milk, fruit and vegetables,'' Ahluwalia told reporters in New Delhi.
Earlier economists has projected food inflation would fall with easing of supply side pressures. Heavy rains over most north and northeastern states had disrupted supply of edibles over the last three months.
According to Crisil chief economist, D K Joshi, supply disruptions were gradually fading and this would help bring down food inflation. He said he expected food inflation to come down to single digit by December end.
Ahluwalia said, ''I think it (food inflation) is still high. I am glad that it has come down. When the (overall inflation) data for November will become available then... in case of food, you will see a much bigger decline.''
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