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Use technology to tame prices, PM's core group suggests

delhi Updated: Apr 08, 2010 21:36 IST

A meeting on rising prices chaired by Prime Minister Manmohan Singh on Thursday recommended the use of technology and global positioning system to track vehicles carrying essential commodities for better management of the public distribution system (PDS).

The meeting at the Prime Minister's House, the 7 Race Course Road residence, attended by eight chief ministers and his senior cabinet colleagues, was convened specially to discuss the rising inflation that is feared to cross the double-digit mark.

The over four-hour long meeting recommended more involvement of Panchayati Raj (village bodies) institutions in working of the PDS.

"For this, introduction of modern technology such as computerisation of PDS operations and the use of global positioning system to track vehicles carrying PDS commodities, smart cards of PDS beneficiaries and display of PDS related information on internet in consumer friendly manner have to be encouraged," the prime minister's core group recommended.

Thursday's meeting came against the backdrop of India's annual food inflation based on wholesale prices rising to 17.7 percent for the week ended March 27 from 16.35 percent the week before.

Over the past 52 weeks, pulses have become costlier by 32.6 percent, milk by 21.12 percent, wheat by 13.34 percent and rice by 8.8 percent, while the prices of potatoes and onions have started easing.

The core group was set up in February with the chief ministers of Andhra Pradesh, Assam, Bihar, Chhattishgarh, Gujarat, Haryana, Maharashtra, Punjab, Tamil Nadu and West Bengal as members.

However, the chief ministers of Punjab and Tamil Nadu skipped the meeting. Punjab was represented by its food minister and Tamil Nadu by its deputy chief minister.

Also present at the meeting were Finance Minister Pranab Mukherjee, Agriculture Minister Sharad Pawar, Planning Commission Deputy Chairman Montek Singh Ahluwalia and the prime minister's Economic Advisory Council head C. Rangarajan.

According to officials, six main issues were discussed during the meeting:

- How to raise the country's farm productivity

- How to bridge the gap between prices at farm-gate and retail market

- How can the Essential Commodities Act be strengthened to prevent hoarding

- How to ensure better delivery of food and strengthen the public distribution system

- How the warehousing network in the country can be augmented, and

- How to ensure better seeds and fertilisers at fair prices to farmers

The core group decided to augment warehousing and storage capacity and build cold chains in the country, a major programme for building up storage capacity has to be taken up, a statement from the agricultural ministry said.

In a bid to tame prices and bring down inflationary expectations, the Reserve Bank of India has already initiated measures to tighten its monetary policy and suck excess liquidity out of the system by hiking some key rates.

"Inflation pressure is stronger than we anticipated. Between November 2009 and February 2010, in a space of four months, the wholesale price inflation has gone from 5.6 percent to 9.9 percent," Reserve Bank of India Governor D. Subbarao said earlier this week.

"We have constantly maintained the need for exiting the expansionary monetary policy. We have also been saying all along that we need to exit in India ahead of other countries because of the growth-inflation trade-off we are facing," he said.