The meeting convened by Prime Minister Manmohan Singh to strategise on controlling price rise ended up confirming what most experts have been saying for the last six weeks, that it will take the post Makar Sankranti crop of onions from Rajasthan to cool down tempers and prices.

At the meeting attended by finance minister Pranab Mukherjee, agriculture and food minister Sharad Pawar, deputy chairperson of the planning commission Montek Singh Ahluwalia and economic advisor to the finance ministry Kaushik Basu, the overwhelming view was that supply augmentation was the way to go. However, sources confirm that monetary policy tweaking was also considered. ?The Reserve Bank of India has already begun its independent assessment of the situation. The meeting also discussed the world wide spike in inflation and phenomenon like China?s price control regime,? said a source.

Mukherjee last month raised his inflation forecast to ?around? 6.5% by March-end from 6%. The WPI inflation was 7.5% in November. The central bank will review its monetary policy on January 25. Analysts expext the RBI to raise policy rates by up to 100 basis points next year. Economists at the Standard Chartered Bank expect the RBI to raise rates by 25 bps on January 25 and by another 50 bps in in the rest of 2011.

Food inflation accelerated to 18.32% in the week ended December 25, the highest rate since July, while onion prices soared 80% during the week. Analysts say there are risks of inflation becoming generalised due to the spill-over effect of higher oil and food prices. The impact has also been felt on Dalal Street.

Sources also say some of tensions between allies Congress and the Sharad Pawar led Nationalist Congress Party (NCP) rose to the surface during the meeting. Sources say that Pawar enquired about the absent commerce minister Anand Sharma, who had been deputed by the Prime Minister to stem the export of food items and take the situation in hand. Sharma is travelling in South Africa at the moment.

Pawar also said he had not been kept in the loop about the country’s trade negotiations with Pakistan for onions and cotton being done by the commerce and external affairs ministry.

In any case the meeting today proved inconclusive and a second round has been called for tomorrow with just what the direction of price control is going to be still a mystery. ?The recent raids on middlemen and the failure to discover large scale hoarding of onion and persihable food items was also discussed,? said a source. Clearly, while the PMO tried hard to sell the line that it was his ?deep concern? over the matter that led to the meeting, the exercise itself has not proven to be fruitful.