Inflation to moderate in coming months: Mayaram

Inflation will moderate in the coming months but the country would need to bridge the demand- supply gap of essential food items to keep prices under check in the long run, said Economic Affairs Secretary Arvind Mayaram.

"Inflation will be a problem. We believe inflation in immediate future will come down marginally, but in the long run if we need to go down to the low single digit inflation numbers, we will have to continue to work towards increasing production and improving the logistics for movement of vegetables," he told PTI.

WPI inflation rose to a 14-month high of 7.52 per cent, while the retail inflation was in double digits at 11.24 per cent in November. The rise in inflation can be attributed mainly to price rise in vegetables and protein-rich items.

"There is in-elasticity of demand in terms of price as far as food is concerned," he said adding there was an urgent need to amend the Agricultural Produce Market Committee (APMC) Act.

He said the APMC Act is "now beginning to hurt" by restricting movement and dissemination of food and cereals. The food distribution needs to be more open and market oriented, he said.

Citing statistics, Mayaram said spurt in demand for food products, driven by improvement in living standards, is also adding to inflationary pressure.

Giving example of egg consumption, he said it has increased from 18 per person per annum in 1993-94 to 33 eggs per person in 20 years time.

"It also indicates that there is now a supply demand gap which needs to be met and therefore a large number of steps have been taken by the government.

"Of course there is a lag, we will see its reflection in next 2-4 years but we will have to continue to work towards increasing the production and creating the right kind of agri infrastructure for the movement of fruits, vegetables and eggs," Mayaram said.

EDITORIAL OF THE DAY

  • The government must only sell PSU stocks that are in demand

    The government’s move to change the methodology of selecting merchant bankers for divesting stake in various public sector undertakings would save d

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

BK Chaturvedi

Delhi and its democratic core

In the last one month, questions have been raised about ...

Kuruvilla Pandikattu SJ

Moral basis for collective living

Laudato si (Praise Be to You”) the second circular letter ...

Dharmendra Khandal

Have you spotted those wasps, yet?

Wasps are insects that ride on the monsoon winds. I ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture