Stating that there was "glaring defect" in policies for storage and marketing of foodgrain, industry lobby group Assocham today picked holes in government "claims" that food inflation would moderate in the coming months.
"The steady trend of food inflation rising above the WPI level exposed some fundamental defects in the production, storage and marketing of foodgrains and other food material especially vegetables and fruits," the chamber said in a paper, 'Supply chains and FDI in large retail'.
Food inflation was hovering at over 15 per cent for the week ended September 11 and prices of cereals, select vegetables and milk kept pressure on the supply chain.
Assocham said food inflation graph continued to be at higher level than the overall price rise since 2007, despite government assurances that their rates would moderate.
"This widening gap (between food and general inflation) does not create any confidence in the government's claim that food prices would moderate in any way in the coming months," it said.
Planning Commission Deputy Chairman Montek Singh Ahluwalia said recently that prices would start declining and food inflation would come down to 6 per cent by December end.
Referring to the problem of storage, the chamber said that with kharif harvest about to arrive in the market from next week, the problem of storage will aggravate.
"There is a grave concern at the inevitable prospects of more food stocks lying in the open," Assocham Secretary General D S Rawat said.
Rawat said that to deal with such problems, government should promote entry of large private sector retail stores that should draw their supplies directly from the farm reducing the burden of the farmers in bagging and transporting their produce to the mandi.
These chains would reduce considerably the waste of perishable farm produce which is estimated to be 35 per cent and above, he added.
Top Section
Explore Business Standard