PM discusses steps to check inflation, RBI may be roped in

New Delhi, Jan 11 (PTI) Under attack over rising prices,
Indian Prime Minister Manmohan Singh on Tuesday met with
senior Cabinet colleagues and is understood to have discussed
various options to check surging inflation, especially of food
items.
Apparently in the light of discussions in the meeting
which remained inconclusive, a decision to export five lakh
tonnes of sugar was put on hold by the Agriculture Ministry
today.
A host of measures, including possible monetary steps
that can be taken by Reserve Bank of India (RBI) were
reportedly discussed at the meeting attended by Indian Finance
Minister Pranab Mukherjee, Home Minister P Chidambaram, Food
and Agriculture MinisterSharad Pawar and Planning Commission
Deputy Chairman Montek Singh Ahluwalia.
There was no official word on the over two-hour long
meeting.
Indications are that the RBI Governor D Subbarao may meet
the Prime Minister to discuss measures to tame inflation.
RBI has already taken steps to tighten monetary policies
resulting in high interest rates and the next review by the
central bank later this month could have further impact on
interest rates.
Pawar, who had earlier announced allowing sugar exports,
reviewed the situation. The export issue would now go to an
Empowered Group of Ministers, headed by Finance Minister
Pranab Mukherjee.
Fuelled by high prices of onion and other vegetables,
fruits, eggs,meat and milk, the food inflation has crossed 18
per cent affecting the common-man.
However, onion prices which could not be broght down
below Rs 55-60 per kg may shoot up with traders in Azadpur
Mandi in the capital threatening to go on indefinite strike
from tomorrow to protest against income tax raids and surveys.
"Onion traders are feeling harassed by income tax raids
and have thus decided to go on strike from tomorrow," Delhi
Agricultural and Marketing Board Chairman Brahm Yadav said,
adding auctions would not take place tomorrow,disrupting the
entire supply chain to the retail point.
Other mandis in Delhi and NCR region may also join the
traders' protest, he said.
But the Delhi Government has threatened to invoke
Essential Services Maintenance Act (ESMA) against traders to
ensure primary commodity supply.
The Centre, on its part, has asked the agri-cooperative
NAFED to open more retail outlets in the NCR region to sell
onion at Rs 35 per kg.