New Delhi, Nov 1: Expressing concern over high food inflation, noted economist and former Union minister Y K Alagh today disputed the government's claims that the rate of price rise will be in check within two months, citing infrastructural bottlenecks.
"It is (inflation) unlikely to come down in two months as is being projected," Alagh said in an apparent reference to the statement made by Finance Minister Pranab Mukherjee on bringing down the inflation rate.
Mukherjee had yesterday said, "The current inflation pressures are mainly because of supply-side constraints of agricultural products. Necessary steps have already been taken. I hope it will have its impact and from November December onward... the rate of inflation will be moderating."
Food inflation soared to an over six-month high of 11.43 per cent for the week ended October 15, as prices of vegetables, fruits and milk went through the roof, hitting the common man.
During his inaugural address at the 38th Foundation Day of the Agricultural Scientists Recruitment Board (ASRB) here, Alagh said checking high prices of food requires addressing infrastructural bottlenecks.
While the overall growth in agriculture is commendable, post-harvest management is not up to mark, he said.
"The food consumption basket is getting increasingly diversified and though cereals still dominate, this dominance is being increasingly eroded by rising expenditure on fruits, vegetables, milk, eggs, meat and fish, which together is also referred to as the 'high value' segment," he said.
Rising demand for these high value products has made it necessary to improve road connectivity, develop horticulture, dairy and animal husbandry and enhance cultivation of cash crops and underlines the need for giving greater market access to the farm sector, Alagh said.
"This is particularly important for the segment of 'high value' agriculture, where the demand pressures are going to be most intense in the coming years and major investments are needed in the development of efficient value chains to save high wastages and intermediation costs," he pointed out.
Alagh, who is the chairman of the Institute of Rural Management (IRMA), Anand, said that in the 12th Five-Year Plan (2012-17) Approach Paper, there is no strategy on widespread agricultural growth.
"For planners to miss out that infrastructure for diversifying agriculture... and even Public-Private Partnerships (PPPs) are difficult in small towns because they do not have the comfort, as CRISIL brings out, is sad," he said.
Alagh, who has also served as a member of the Planning Commission, said, "The biggest threat to India's growth is from rising food inflation."
The demand is growing fast and the supply is slow, which is leading to a rise in food inflation, he said, pointing out this will slow down India's growth momentum.
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