The government on Wednesday pegged economic growth for the current fiscal at 7.75 per cent, higher than all previous estimates, but said high food inflation remained a cause for concern.
Meanwhile it was learnt that Prime Minister Manmohan Singh will meet State chief ministers later this month to discuss the issue of rising food prices.
The prime minister will also review the implementation of Essential Commodities Act.
Earlier, in a pre-Budget interaction with states finance ministers, Union Finance Minister Pranab Mukherjee pointed out that there was enough wheat and rice stocks and proposed open market sale for offloading of these stocks to increase availability in the market, which would in turn ease prices.
"A major area of concern is high food inflation; WPI index increased by 19.79 per cent, therefore collaborative efforts of the central and state governments are required to tackle this problem. . . Offtake of surplus stock by the state governments are not satisfactory. Therefore, all the state governments may cooperate in this regard to lift these surplus stock alloted to them," Mukherjee said at the meeting.
He also called for efforts to increase farm productivity.
Mukherjee said that economic recovery will be a collaborative effort of the centre and the states.
Economic growth stood at 7 per cent during the first half of the current fiscal, Mukherjee said, pegging GDP growth for the whole fiscal at around 7.75 per cent -- a number that exceeds the initial estimates of the government as well as the Reserve Bank of India.
The Union finance minister asked the state governments to utilise the cash surplus for development activities.
Prices to come down by month-end: Montek
Describing the food inflation a 'temporary phenomenon', the Planning Commission has said that the prices of various food items will decline towards the month-end and that the economic growth during the year would exceed 7 per cent.
"The food price inflation is a worrying problem, but in my view the food price inflation strictly on vegetables etc. is a temporary phenomenon... they (prices) will go down further," Planning Commission Deputy Chairman Montek Singh Ahluwalia said in an interview to Karan Thapar for India Tonight programme telecast on CNBC TV-18.
With the coming of the rabi (winter) crop, he added, "you will see a drop in cereal inflation compared to what it is now . . . wait for the end of January . . . on the foodgrain front there will be ample available".
Driven by rising prices of pulses, potato, onion and other vegetables, the food inflation soared to decade's high of about 20 per cent in December before sliding marginally.
Photograph: Reuters
