The report doesnt dwell enough on the impact of the government holding excess foodgrain stocksstocks are 3.13 times what the buffer norms arethough the costs of this are huge. While around 7-10 million tonnes of wheat are stored in the open and likely to rot soon, just exporting this would fetch the government around R20,000 crore at todays prices. The MYEA does say that the hike in MSPs, though necessary to give farmers remunerative prices, has been a contributor to rising inflation in the country; the mismatch between demand and supply, due to excessive FCI procurement driving out supplies from the market, the report says, has also contributed to inflation. Most interesting is the argument made in favour of raising diesel priceswhile the standard argument is that this will raise inflation levels through higher transportation costs, MYEA argues it will lower inflation levels through the fiscal deficit impact. Between 2011 and 2015, MYEA projects average inflation at 7.13% and says a 30% hike in diesel prices will lower this to 5.68%. Whether this signals a cut in diesel subsidies, however, is unclear. The MYEA believes the economy is bottoming out but that seems optimistic. For one, part of the Q2 hike is at odds with the IIP data and the capital formation recovery doesnt square with the order books of capital goods producers. The Q2 agriculture growth, similarly, doesnt take into account the drought which will figure in Q3 data. In all probability the economy will pick up only in Q4, necessitating another growth downgrade from the ministry later in the year.