FM attributes high onion prices for steep rise in food inflation

New Delhi: Returning to double digits, food inflation rose to 12.13% for 11th December, the third successive week of increase, with finance minister Pranab Mukherjee attributing high onion prices as one of the reasons, reports PTI.

"I am afraid there has been some upward movement of food items... of course the weekly fluctuations take place and one of the reason may be the high prices of onion, which (we already) have taken steps," Mr Mukherjee told reporters.

The official data released today showed that for week ended 11th December, food inflation rose by 2.67 percentage points from 9.46%, touching a six-week high.

Food inflation pinched the common man's household budget, as prices of onion, fruits, eggs, meat and fish, milk and vegetables became expensive.

Economists feel this development may prompt the Reserve Bank of India to raise key policy rates.

The annualised price increase of onion worked out to 33.48%, fruits-20.15%, eggs, meat and fish-19.35 per cent, vegetables-15.54% and milk by 17.83%.

Onion prices rose 4.56% on a week-on-week basis.

"The prices of onion must have impacted (inflation) to some extent. There is some increase in prices of milk in the last few weeks. So that must have impacted to some extent but we are on top of it," cabinet secretary KM Chandrasekhar said.

Continuing to battle against onion prices, which touched Rs70-Rs80 a kg in the last few days, a committee of secretaries, headed by the cabinet secretary, met this morning to take stock of the situation.

According to Mr Chandrasekhar, the government is trying to put in place all the logistics and policy support measures to ease the onion prices.

These include moving of the staple vegetable by the railways and going in for duty free imports.

"I think it will ease very quickly...We have decided to move onion from different areas. There is a shortfall in Maharashtra, but Karnataka is reasonably good and Gujarat is producing quite a lot of onion," he said.

However, the extra burden on households on account of fruits vegetables and milk was at least partly made up by a modest decline in cereals-0.35%.

Within the cereals group, pulses dropped by 10.77%, but the decline has to be seen against a sharp increase in prices last year.

Wheat also showed a decline of 5.14%.

Mr Chandrasekhar said, "As far as international prices are concerned, on rice, wheat and sugar we are fairly comfortably placed. We are not exporting rice. We have enough stock."


India headed towards double-digit growth in next fiscal: Prez

Mumbai: Upbeat on the Indian economy and its growth trajectory, President Pratibha Devisingh Patil today said the country's gross domestic product (GDP) was headed towards double-digit growth in the next fiscal, reports PTI.

"This fiscal year, we are confident that our nation's economy will grow at about 9%. Next year, we should be on a sustained growth path of 9%-10%," Ms Patil said at a function to kick-off public sector Central Bank of India's centenary year celebrations here.

According to government data, the Indian economy grew by an average of 8.9% during the first-half of the current fiscal or the April-September period.

This has led many, including the finance ministry and rating agencies, to upwardly revise their growth estimates for the year (FY'11).

Ms Patil said post-financial crisis, India's economic recovery was quicker because of its ability to cope with external disturbances, in spite of being well-integrated with the global economy.

Banks will have to play a pivotal role in the growth story and the first priority for lenders should be to strengthen themselves to support a vibrant and inclusive economy," the president said.

Stressing on the financial inclusion agenda, she asked banks to take a "holistic approach" in the roll-out of the programme keeping in mind the different financial needs of the target customers.

"Issues like preferential interest rates for the poor and self-help groups in rural areas, as well as extended loan tenures that help them stay invested should be looked into," she said in her address.

Ms Patil also called upon Indian banks to achieve greater size to become "among the top global players" and listed efficiency as the key which will help the institutions expand.

The integrated global economy should "spur Indian banks to attain high standards, so that they can compete with the best in the world," Ms Patil said.


Centre for speeding up onion imports, asks states to act against hoarders

New Delhi: The Centre on Wednesday asked states to take stringent action against hoarders and directed the commerce ministry to speed up onion imports as part of measures to ease the crisis over spiralling onion prices, reports PTI.

Cabinet secretary KM Chandrasekhar, who is personally monitoring the situation, has told commerce secretary Rahul Khullar to "speed up" onion imports to augment domestic availability and check rising prices of onions, which are ruling at Rs70-Rs85 per kg in retail markets across the country.

Official sources said the cabinet secretary has also asked the Railway Board to provide more rakes for expeditious movement of onions from producing regions to different parts of the country.

"State governments have been asked to take stringent action against hoarders," sources said.

The cabinet secretary will review the situation on Thursday with the secretaries of the agriculture and consumers affairs ministries, they said.

As part of measures to rein in onion prices, the government has already banned exports and abolished import duty on the politically sensitive commodity.

Due to the measures taken by the government, wholesale prices of onions have been declining since yesterday, though the impact is yet to be seen in retail markets.


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