Priority to more foodgrain production to curb inflation: Pranab

KOLKATA/NEW DELHI - Pointing to the existence of a supply-demand gap in foodgrain which is causing prices of essentials to soar, Finance Minister Pranab Mukherjee Monday said he has given priority in the budget for 2011-12 to increasing production of foodgrain to contain inflation.

“If we try to understand what is causing inflation in our country, we will see that there exists supply and demand difference in foodgrain. Thus in this budget, I have proposed six to seven projects to increase

foodgrain production,” Mukherjee told private Bengali news channel Star Ananda.

“In the first half of the last year, there were sky-rocketing prices of rice, wheat, sugar and edible oil. Then the government allocated rice and wheat in the market and provided subsidy on mustard oil. In the second half of the year, prices of these food items came down. But prices of onions started to increase. Following that, we banned the export of onions,” he said.

“For food security of 120 crore people of the country, we need to increase foodgrain production. So I proposed more than Rs.1,000 crore additional allocation under Rashtriya Krishi Vikas Yojana. I also increased allocation under Green Revolution in the eastern part of the country,” said the finance minister.

Stating that there existed huge differences in Wholesale Price Index (WPI) and Consumer Price Index (CPI), he said this was not acceptable.

“I urge state governments to take responsibility to distribute

foodgrain under the Public Distribution System,” he added.