With inflation in food products ruling at nearly 17%, the government has decided to allocate an additional 10kg of rice and wheat to each poor household for two months under the public distribution system.
Cause of concern: Wheat piled up at the Hodal mandi in Haryana. Food inflation lowered to 16.81% in the week ended 9 January. Ramesh Pathania / Mint
Food inflation lowered to 16.81% in the week ended 9 January from 17.28% a week earlier, as measured by the country’s Wholesale Price Index. In December, food inflation reached 20%, the highest in a decade, prompting some experts and officials to blame the price rise on restricted supply.
India’s benchmark wholesale price inflation has been racing at a fast clip, reaching 7.31% in December. The Reserve Bank of India had forecast inflation to rise to 6.5% by 31 March.
“The cabinet committee on prices (CCP) today reviewed the prices of essential commodities. The major areas of concern identified are prices of pulses, sugar, potatoes and onions,” the government said in a statement on Thursday. “An ad hoc allocation of 10kg (of food and wheat) per family per month over and above the existing allocation of foodgrains will be made for two months, January and February, 2010 to cover all card holders.”
CCP is chaired by Prime Minister Manmohan Singh.
Card holders include families falling below the poverty line, above the poverty line, and the poorest of the poor under the Antyodaya Anna Yojana. The total additional allocation would be 1.06 million tonnes (mt) of rice and 2.54 mt of wheat, according to a government estimate.
State governments will be allocated the additional rice at the minimum support price (MSP) of Rs15.37 per kg, and wheat at Rs10.80 per kg. MSP is the minimum price at which the government procures foodgrains from farmers for the public distribution system.
In another development, the government approved the setting up of joint venture companies by France-based Alstom SA and its group companies with Bharat Forge Ltd. This will result in a foreign direct investment of around Rs490 crore.
The cabinet committee on economic affairs (CCEA) also approved a scheme for setting up model degree colleges in each of the 374 educationally backward districts identified by the government.
The committee cleared another programme, on a pilot basis, to provide urban amenities and better livelihood conditions to people living in villages.
The scheme, called Provision of Urban Amenities in Rural Areas, has an outlay of Rs248 crore in the 11th Plan (2007-12).
To encourage higher education, the cabinet decided to double the number of seats under the junior research fellowship. This will allow 12,000 students to enrol for doctorate programmes in Indian universities with government aid.
The cabinet committee on infrastructure (CCI) gave its nod for the electrification of vital railway links in southern and northern India, as well as the upgradation of National Highway 7 between Hyderabad and Bangalore to ease passenger and freight flow.
CCI also gave an in-principle approval for establishing a national knowledge network, which would link all knowledge institutions through high-speed data connectivity. This is expected to encourage sharing of specialized resources and research.