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Food prices will dip: PM

The worst of food inflation has ended, Prime Minister Manmohan Singh told a chief ministers’ conference on prices on Saturday, report Aurangzeb Naqshbandi and Zia Haq. Modi attacks Centre

delhi Updated: Feb 07, 2010 01:13 IST

The worst of food inflation has ended, Prime Minister Manmohan Singh told a chief ministers’ conference on prices on Saturday.

The meet was sharply divided along political lines. In the end, it was decided that a high-level group of ministers (GoM), with representatives from the Centre and nine states, would fix supply mismanagement.

The meet saw several non-Congress states forming a bloc and blaming the Centre.

Gujarat chief minister Narendra Modi had a run-in with Finance Minister Pranab Mukherjee when he said NDA-ruled states, such as his, were “more serious” about checking prices.

Mukherjee snapped back: “This is not an occasion to politicise the issue. We have all come together to solve the problem (of price rise).” Then, Rajasthan chief minister Ashok Gehlot joined issue, taunting Modi: “Where is the NDA today?”

Modi also confronted Mukherjee on the Congress’s poll promise of cheaper foodgrains for the poor through a National Food Security Act. At this point, the PM stepped in. “We are yet to complete a year in office. We will certainly fulfil this promise. But the government had to focus on the drought situation and we did not want to play with food stocks,” Singh said.

Agriculture Minister Sharad Pawar, who faced flak from the Congress Working Committee on Friday, was again at the receiving end. Uttar Pradesh chief minister Mayawati skipped the meet but her representative, UP finance minister Lalji Verma, blamed Pawar for talking up prices.

Food prices have surged due to last’s year drought and a supply crunch. On December 5 last year, the country’s food inflation rose to 19.95 per cent, the highest in 11 years .

Political rivalries apart, Saturday’s meet brought to the fore India’s hazy supply chain. “I think our distribution system is hopelessly outdated,” the PM said, echoing state concerns.

The committee announced after the seven-hour brainstorming will seek to cool prices mainly by ensuring strict implementation of the Essential Commodities Act and by moderating price mark-ups between wholesale and retail markets.