The demand for lifting ban on wheat and rice exports could only be considered following the softening of food inflation, said Prime Minister?s Economic Advisory Council (PMEAC) chairman, C Rangarajan. Speaking on the sidelines of a CII Finance Forum, here, he said, ?On the food inflation target, we should be back to the comfort zone of 5% before considering the easing of ban on exports. I am very much hopeful that with record grain output, food inflation would moderate considerably in April?, he said.
In 2007, the government slapped a ban on export of rice and wheat to check spiralling in prices in the domestic market, however, now with the projected bumper harvest of 84.3 million tonne of wheat and 102 million tonne of rice in 2010-11, there has been a strong demand from exporters and some sections of the policymakers to allow export of wheat and rice. Rangarajan said that taming inflation is the top priority of the government above other concerns like allowing export of grains in a bumper crop year.
Rangarajan told FE that forecast of good monsoon by Met department will definitely boost agriculture output. ?When we are hoping to achieve 9% GDP growth in the next year, the farm sector GDP is expected to grow at 4%. Since the last four years, the farm sector GDP has been growing at an average rate of 2.4-2.5%. With the prediction of good monsoon for second year in a row, the farm sector GDP could definitely witness an uptick in growth from the current 2.5% to the proposed 4%. The high potential impact of normal monsoon is good for north east region of the country which had received poor rainfall last year?, he said.
Earlier, delivering his inaugural address at the finance forum, the PMEAC chairman referred to the power sector as an economic activity where the country needs to pay significant attention. ?As far as capacity addition in power sector is concerned, China is easily able to add in one year, what India could achieve over a period of 5 years. In the XI Plan period we were forced to revise our target from 72,000 MW to 62,000 MW with the apparent possibility of adding only 50,000 MW in the current XI Plan period?, he said. The capacity addition was constrained due to environment clearance bottlenecks to some of the hydro electric projects and land acquisition delays in thermal plants causing the sector to fall below the pegged target.
