Price spike: Finance minister asks states to remove supply bottlenecks

Finance minister Pranab Mukherjee has written to state chief ministers asking them to take immediate action to remove all bottlenecks in the supply chain of food items in order to improve their availability.

Mukherjee who blamed bottlenecks in the supply chain for rising prices of essential items, has asked state governments to urgently look into the supply management of these items, particularly local factors that, he said, are driving the current round of food inflation in the country.

He pointed to the widening gap between the wholesale and retail prices to prove his point. Mukherjee said that the state governments need to ensure that all bottlenecks in the supply chain are removed so that food prices can be brought down quickly.

He cited the build-up of food inflation over the past few weeks, which stood at 18.3 per cent during the week ended 25 December.

The finance minister said the inflationary pressure has been due mainly to a spurt in the prices of a few primary items like fruits and vegetables, milk, meat, poultry, eggs and fish.

He said the inflation data released on Thursday showed that three-fourth of food inflation in the country was due to rising prices of vegetables, and nearly one-fourth due to milk prices. The prices of cereals and pulses have shown a declining trend, he pointed out.