Food inflation may spread to other sectors, says economic panel - India News and Travel Times Provides India-centric and other News and Features

Spiraling food inflation in the country could spread into other sectors, posing a risk to the projected growth rate of 8.2 percent in 2010-11, the Prime Minister's Economic Advisory Council said on Friday. Speaking in the national capital, the Council's Chairman, Dr. C. Rangarajan, called on the government to manage available food stocks better. "The question really as far as the, as far as controlling the inflation (goes), lies in better management of food stocks that are available," said Rangarajan. According to Rangarajan, India's fiscal imbalance is also a matter of concern and the process of consolidation must begin in the next financial year itself. India, which is Asia's third biggest economy, is seen growing at more than 7.2 percent in the year that runs till March 31, largely on the back of stimulus measures taken to boost the economy in the aftermath of the global financial crisis. "For the year 2009-10 the CSO (Central Statistical Organisation) has come up with the projection or the estimate, that the economy would grow by 7.2 percent in the current year. This will be decomposed into an agricultural growth rate of -0.2 percent, industry including construction at 8.6 percent and services at 8.7 percent," said Rangarajan. The optimistic growth projections have raised expectations that a strong recovery may lead to tighter fiscal and monetary policy. Plans for an exit from stimulus policies may be in the national Budget on February 26. The government has been reluctant to withdraw stimulus steps such as spending and duty cuts, which it took up since late 2008 to shore up the economy. The government has said it wants to get the 1.2 trillion dollar economy back to growth rates of around nine percent seen before the global slowdown.