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Finance Minister Pranab Mukherjee on Tuesday underscored an urgent need for reviewing the present system of monitoring wholesale and retail prices of essential commodities.
Addressing the first meeting of the Inter-Ministerial Group (IMG) on Inflation, headed by Chief Economic Advisor Kaushik Basu here, Mr. Mukherjee hoped that the group would come forward with concrete implementable suggestions after serious deliberations on the issue.
Mr. Mukherjee said there was also a need to improve the manner in which available information was put to use in designing and formulating the required policy responses. In this regard, he pointed out that there was perhaps “a case for establishing standard operation procedures for addressing both sudden and anticipated price fluctuations.”
He reminded the IMG that its mandate was to look at the whole range of inflation policy issues, from distribution of foodgrains and vegetables to macro policies connected to fiscal and monetary matters and that he would be looking forward to its advice on all these issues in future.
Set up by Prime Minister Manmohan Singh under the chairmanship of Dr. Basu in the wake of skyrocketing food prices in recent months, the IMG's brief is “to review the inflation situation and suggest corrective measures.”
Major concern
In his initial remarks, Mr. Mukherjee noted how inflation re-emerged as a major concern in the past few months, particularly in emerging economies. “For us in India, the major pressure at present is emanating from prices of food and energy sectors. The risk of its spilling into the core sector requires constant monitoring, timely and proactive response,” he said.
During the discussions, the IMG took some important initial decisions on how information from various sectors of the economy would be collated and systems developed for early warning systems.
According to an official statement, it was stressed at the meeting that the authorities concerned “must move on from reacting to every episode of inflation and price spike with immediate policy responses, to using these episodes to study flaws that may be there in the system and take advance corrective measures so that such spikes do not occur in the future.”
Issues such as link between futures market and price rise, market margins, agricultural productivity issues and the role of the State governments and district administration in price management were also taken up for discussion. The IMG's next task, the statement said, would now be to set up an organisational structure.
Apart from Dr. Basu, the meeting was attended, among others, by its members such as Agriculture Secretary P.K. Basu, Consumer Affairs Secretary Rajiv Aggarwal, Food & Public Distribution Secretary B.C. Gupta, Secretary Animal Husbandry & Dairying, Rudra Gangadharan, Senior Advisor (Planning Commission) Ashok Sahu, and Advisor (Department of Economic Affairs) R.N. Dubey as Member Secretary.
Addressing the first meeting of the Inter-Ministerial Group (IMG) on Inflation, headed by Chief Economic Advisor Kaushik Basu here, Mr. Mukherjee hoped that the group would come forward with concrete implementable suggestions after serious deliberations on the issue.
Mr. Mukherjee said there was also a need to improve the manner in which available information was put to use in designing and formulating the required policy responses. In this regard, he pointed out that there was perhaps “a case for establishing standard operation procedures for addressing both sudden and anticipated price fluctuations.”
He reminded the IMG that its mandate was to look at the whole range of inflation policy issues, from distribution of foodgrains and vegetables to macro policies connected to fiscal and monetary matters and that he would be looking forward to its advice on all these issues in future.
Set up by Prime Minister Manmohan Singh under the chairmanship of Dr. Basu in the wake of skyrocketing food prices in recent months, the IMG's brief is “to review the inflation situation and suggest corrective measures.”
Major concern
In his initial remarks, Mr. Mukherjee noted how inflation re-emerged as a major concern in the past few months, particularly in emerging economies. “For us in India, the major pressure at present is emanating from prices of food and energy sectors. The risk of its spilling into the core sector requires constant monitoring, timely and proactive response,” he said.
During the discussions, the IMG took some important initial decisions on how information from various sectors of the economy would be collated and systems developed for early warning systems.
According to an official statement, it was stressed at the meeting that the authorities concerned “must move on from reacting to every episode of inflation and price spike with immediate policy responses, to using these episodes to study flaws that may be there in the system and take advance corrective measures so that such spikes do not occur in the future.”
Issues such as link between futures market and price rise, market margins, agricultural productivity issues and the role of the State governments and district administration in price management were also taken up for discussion. The IMG's next task, the statement said, would now be to set up an organisational structure.
Apart from Dr. Basu, the meeting was attended, among others, by its members such as Agriculture Secretary P.K. Basu, Consumer Affairs Secretary Rajiv Aggarwal, Food & Public Distribution Secretary B.C. Gupta, Secretary Animal Husbandry & Dairying, Rudra Gangadharan, Senior Advisor (Planning Commission) Ashok Sahu, and Advisor (Department of Economic Affairs) R.N. Dubey as Member Secretary.
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