With the increase in rabi output and Indian Meteorological Department predicting a normal monsoon, Planning Commission member Abhijit Sen on Wednesday said food inflation would come down significantly to 4% or 5% by November from the current level of more than 16%.
Sen also noted that farm sector growth would be revised upwards to 0.2% in 2009-10 from the earlier estimate of minus 0.2%.
?Prices have started falling from March after good Rabi arrival. For some commodities like onion and potatoes, the fall is very sharp. But overall prices are very high. After Kharif season, prices will come down more,? Sen told reporters. He said that it is possible that food inflation could come down to a single digit over the next six months following higher kharif production.
According to a data released by the commerce and industry ministry last week, food inflation rose to 16.49% for the week ending May 8 from 16.44% in the previous week, mainly because of nominal increase in prices of vegetables such as onion, potato and pulses.
Earlier this week, Prime Minister Manmohan Singh also hoped that inflation would come down to 5% to 6% by December.
On agricultural growth rate, Sen said growth is likely to be 0.2% in 2009-10 due to upward revision in production in third advance estimate. ?In 2010-11, the farm sector growth is likely to be 5-6% if Met department forecast on monsoon comes true,? he noted.
In the third advance estimate of farm production released recently by the agriculture ministry, foodgrains production has been revised upwards to 218.19 million tonne from 216.85 million tonne.
Abhijit Sen also advocated increasing the government?s buffer stock and strategic reserve norm for key food grains such as rice and wheat to 25-30 million tonne from the current level of 14 million tonne for meeting exigencies.
?Buffer stock of foodgrains should be raised substantially to 25-30 million tonnes not just to meet the fluctuating market conditions but also PDS demand,? he said after delivering the BP Pal memorial lecture organised by Indian Agricultural Research Institute. He also advocated reducing the basic distance between farmers and public sector research institutes.
?Its a matter of great concern…..we have to do everything to get agriculture moving,? Abhijit Sen said, adding that agricultural hasn?t done that well after the initial spurt during green revolution.
