Inflation reflection of economic prosperity: Montek

New Delhi, Jan 12 (PTI) Attributing rising prices partlyto growing economic prosperity, Planning Commission DeputyChairman Montek Singh Ahluwalia today exuded confidence thatfood inflation would come down by the end of this fiscal.

"Yes it is true that milk and vegetable prices are high.

You know some of this is a reflection of economic prosperityand purchasing power," he told reporters here.

Driven by spurt in onion prices and other vegetables,food inflation soared to year''s high of 18.32 per cent for theweek ended December 25.

Ahluwalia said, "Food inflation will be much lower by theend of this year than they were a year earlier."

"The trouble with vegetables is that it not very seasonaland we don''t have very good marketing system," Ahluwalia said,adding there was a need to improve agriculture marketingsystem.

"The solution does not lie in imposing price control ormonetary restriction. It lies in modernising agriculturemarketing," he stressed.

The state governments, he suggested, should exempthorticulture produce from the ambit of the AgricultureProduce Market Committees (APMC) Act.

"APMC Act is very outdated. It is an instrument whichperpetuates monopoly of a group of traders. I know there wouldbe difficulties in doing that (overhauling APMC Act)," hesaid.

Indian economy expanded by 8.9 per cent during the firsthalf of the current fiscal. The growth in the current fiscalis likely to be about 9 per cent, up from 7.4 per cent in theprevious fiscal.