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Supply constraints driving food prices up: Cabinet Secy

Amid inflation doubling to 1. 54 per cent in October on monthly basis, the Government today admitted that there have been supply constraints on some food items, leading to rising prices of those items.

business Updated: Nov 16, 2009 17:00 IST

Amid inflation doubling to 1. 54 per cent in October on monthly basis, the Government on Monday admitted that there have been supply constraints on some food items, leading to rising prices of those items.

"Primarily there has been supply constraints in particular commodities. As it is, the overall rate of inflation is just over one per cent. In particular commodities, there has been, not only in India but globally, supply constraints which is reflecting in this (price rise)," Cabinet Secretary KM Chandrasekhar told reporters in New Delhi on Monday.

It can be noted that some food times, especially vegetables, saw major price increases. Within the past one month alone, onion became costlier by around 30 per cent and potatoes by over 11 per cent.

Even as inflation shot up massively from 0.50 per cent in September to 1.54 per cent in October, overall food price came down in October by one per cent and vegetables by 16 per cent.

The Cabinet Secretary admitted that inflation has to be watched and expressed confidence that prices would moderate once the supply situation improves.

Speaking on the sidelines of a CII seminar, Chandrasekhar informed that a number of measures have been taken to augment supply of food products and procurement is going well. "Import duties have been removed on most of these goods, free import is allowed, procurement is going well; last year it did well, and this year it is even better," he added.