Union Cabinet meet to discuss price rise

New Delhi, Mar 31: The Union Cabinet Committee on Prices will meet this evening to evaluate factors responsible for soaring prices, especially of some food and metal items to lessen the inflation heat crippling the country's economy. The meet assumes significance in the wake of forthcoming polls in at least seven states, mostly in north India.

"The committee will generally take stock of the current price line," a senior Food and Public Distribution Department official said. Inflation rate surged to a 13-month high of 6.68 per cent for the week ended March 15 as against 5.92 percent a week ago mainly on account of costlier food items like vegetables and mustard oil and metal products like joist and rolls and bright bars. Retail prices of some oils have shown a rising trend. While vanaspati oil became dearer by Rs 10 a kg to Rs 79 in the month ended March 27, mustard oil is available at Rs 79 against Rs 72.

According to official figures, in Delhi wholesale prices of essential food items have shown a mixed trend in the last month. However, it is retail prices that have hit the consumers more than wholesale prices.

Union Finance Secretary D Subbarao had said that 6.68 per cent inflation rate was partly due to "high global commodity prices".

Metal and food prices spurted inflation to the highest number in over a year, much above the Reserve Bank of India's (RBI) tolerance level of five percent.

On Friday, Union Finance Minister P. Chidambaram had said that the Central Government would take all possible measures to curb inflation even at the cost of slowing down the economic growth. The same day, Union Commerce Minister Kamal Nath had said the government is looking at a proposal to ban non-basmati rice exports and is also going to recommend scrapping of import duty on steel.

According to analysts, the highest increase was contributed by the index for basic metals. Alloys and metal products group which rose a significant 4.4 per cent due to higher prices of items like joist and rolls, bright bars, angles, channels and sections.

Commerce Secretary G K Pillai said another high-level meeting would be held on Wednesday to consider measures for maintaining adequate supply line.

The Group of Ministers on prices headed by External Affairs Minister Pranab Mukherjee will meet on April 2 to review prices of rice, wheat and procurement of edible oil, according to media reports.

The Reserve Bank is slated to take a call on its monetary stance at its annual policy on 29th April and may further tighten money supply even at the expense of some growth, if high inflation continues.

ANI