Govt forms inter-ministerial group on inflation

New Delhi, Feb 7 (PTI) The government has set up theInter-Ministerial Group (IMG) to suggest measures to controlspiralling prices, particularly of food articles, almost threeweeks after the announcement of forming such a body.

The IMG, headed by Chief Economic Adviser in the FinanceMinistry Kaushik Basu, has been asked to firm up aninstitutional mechanism to read "warning signals" with regardto agricultural production.

The announcement on setting up of the IMG was made onJanuary 13 after Prime Minister Manmohan Singh helddiscussions with senior ministers at the height of the onioncrisis.

The seven-point terms of reference to the IMG includestudying trends in international production and stocks,besides reviewing prices of major commodities and makingrecommendations for fiscal, monetary, administrative measures.

IMG will also review trends in rainfall as Indianagriculture heavily dependent on monsoons.

It will assess the impact of rain on production andstocks and come out with policy suggestions regarding exportsand imports of the primary food articles.

Secretaries of Consumer Affairs, Food and PublicDistribution, Agriculture and Cooperation, Animal Husbandry,Dairying and Fisheries, and a representative of PlanningCommission are part of the group. R N Dubey, Economic Adviserto the finance ministry will be the member secretary.

Its recommendations will be considered by the Committeeof Secretaries.

Inflation remains a big worry for both the Reserve Bankand the Finance Ministry. "Now the other issue is inflation,trade balance... these are to be addressed," Finance MinisterPranab Mukherjee said after expressing satisfaction overprojection, pegging the GDP growth at 8.6 per cent for thecurrent fiscal.

The overall inflation has remained above the comfortzone of 5-6 per cent for over a year now.

In December, inflation shot up to 8.43 per cent, from7.48 per cent in the previous month. Food inflation for theweek ended January 22 stood at 17.05 per cent.

RBI Deputy Governor Subhir Gokran also indicated thatthe monetary policies of the central bank will remain"anti-inflationary".