Govt appoints consultant to study food inflation

The consultant would analyse if the increase in minimum support prices of different crops also add to the price

The government has appointed a consultant to study structural factors affecting food inflation, and has asked it to submit its report by March 31.

The consultant – National Collateral Management Services – will identify major structural factors responsible for rise in prices of rice, wheat, pulses, edible oil, onion, tomato, potato, sugar and milk over the past five years. The study will help the government in taking corrective measures, a consumer affairs ministry official said.

Since a host of issues are responsible for the rise in food items’ prices, the study will help it share the responsibility with other ministries, the official said.

“We have submitted the first draft to the ministry and awaiting its feedback. Once we receive that, we will prepare the final report,” said Sanjay Kaul, managing director and chief executive officer of NCML. He said the report would be submitted by March 31.

The wholesale food price inflation rose 6.02 per cent in January compared with 8 per cent surge year ago. The WPI for food increased 8.17 per cent in December 2015. The consumer price index for food items increased 6.85 per cent in January against 6.14 per cent in the year-ago period. The CPI for food articles was 6.4 per cent in December 2015.

“We have gone to the ground in doing a sample survey of households and have analysed inputs from intermediaries, which are considered to add up to the cost of food,” said Kaul.

The consultant would analyse if the increase in minimum support prices of different crops also add to the price, he said. The global co-relation of prices of commodities, which India imports or exports in substantial quantity, has also to be analysed.

“We will also suggest measures required to control inflation,” Kaul said. “Once you know the causes, it becomes easier to find solution,” he said adding the report would not be a generic type of study.

Since every commodity has different dynamics, the report will analyse each food item in detail, he said. While s influenced by demand-supply, others are due to the government policy.

prabhudatta.m@mydigitalfc.com

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