Government to announce measures to curb rising prices (Roundup)

NEW DELHI - The government Wednesday is expected to announce measures that it intends to take to curb rising food prices that have made things difficult for the common man a day after Prime Minister Manmohan Singh chaired a meeting on the issue.

As a follow-up to the meeting, Finance Minister Pranab Mukherjee met Agriculture Minister Sharad Pawar and Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, to discuss measures some of which were suggested in Tuesday’s discussions with the prime minister.

Among some of measures which were suggested were withdrawing some of the government’s decisions related to food items like export of 5 lakh tonnes of sugar and hiking prices of wheat and rice sold through the public distribution system to families above the poverty line.

“Whatever decision has been taken will be brought to the notice of the prime minister and thereafter released to the media sometime today,” Pawar told reporters after the meeting with Mukherjee.

India’s food inflation has soared to over 18 percent, led by onions which are selling in most parts of the country at Rs.55-60 per kg. In some places it is selling for a high of Rs. 100 per kg.

Wholesale onion traders who were on a strike, apparently peeved at being called hoarders and held responsible for the rising price of the commodity, called off their stir after they met Delhi Chief Minister Sheila Dikshit Wednesday afternoon.

The traders, some of whom were also raided by officials of the income tax department, were also assured of no more harassment by way of inspections or raids on their premises.

The prime minister is also expected to meet Reserve Bank of India Governor D. Subbarao to discuss ways of curbing high inflation.

Analysts and India Inc widely expect the central bank to raise key interest rates in order to pull down inflation - a move which could have an adverse impact on industrial output that slowed down to an 18-month low in November.

According to official figures, the index for industrial production nudged upwards by a meagre 2.7 percent in November, losing close to 9 percentage points from the 11.3 percent growth it logged in the like month of 2009.

Even in October 2010 the IIP had risen by 11.29 percent.

Meanwhile, opposition parties - from the Left Front to the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) - have scheduled a series of public rallies to highlight the price spike, particularly of essential food items.

Left parties, have been demanding that petrol and diesel prices to be lowered. That is however, unlikely to happen with losses mounting on the books of oil companies on account of selling subsidised fuel.