Food inflation to ease next month: Planning Comm Dep Chairman

New Delhi, Jan 4 (PTI) The Planning Commission of India
Monday said food inflation will come down next month from a
more than a decade's high of around 20 per cent, as
apprehensions about adverse effect of drought were easing.
"I think this fear of negative impact of drought being
reduced, there will be a softening in food price inflation in
the next month," Planning Commission Deputy Chairman Montek
Singh Ahluwalia told reporters on the sidelines of a
Federation of Indian Chambers of Commerce and Industry (FICCI)
function here.
He further said that inflation at the moment was not
caused by excess money supply but was dominantly on account of
surge in food prices.
While refusing to speculate on what needs to be done to
curb inflation, he said, "When inflation begins to go up, one
of the instruments that people use is monetary instrument."
Reserve Bank of India is scheduled to review its monetary
policy stance later this month and has dropped hints of
tightening money supply. Ahluwalia, however, said that it is a
complex issue as the policy makers have to deal with only one
set of price rise (food).
Following widespread drought and floods in various parts
of the country, food inflation climbed to more than a 10-year
high of 19.95 per cent in December, driven mainly by higher
prices of potato, other vegetables and pulses.
According to latest figures, food inflation stood at
19.83 per cent during the third week of December. PTI MG
AHM