New Delhi: Eminent economist Bimal Jalan today said the Centre should release more wheat and rice into the open market from its “large stocks”, a move that will help in taming food inflation.
His comments come at a time when the government is also contemplating the relaxation of an export ban on wheat and rice.
“We have large stocks. We should not hesitate to release much more foodgrains like rice and wheat in the market,” the former Reserve Bank governor said..
For the week ending 18 June, food inflation declined to 7.78% from over 9.13% in the previous week.
Both the government and Reserve Bank had been maintaining that the high inflation is largely due to supply side constraints.
“We should not hesitate to do whatever is required to do (to check inflation),” Jalan said.
Food prices are rising even as the government godowns are overflowing on the back of bumper production and procurement in the last three-four years.
The government had record rice and wheat stocks of 65.59 million tonnes in its godowns at the beginning of June.
As per the buffer stock norm, government godowns should have 31.9 million tonnes as of July 1 of any year.
Of the total grains stock, FCI had 27.64 million tonnes of rice and 37.83 million of wheat at the start of June.
Last week, food minister K V Thomas said his ministry was in favour of allowing the export of three million tonnes of wheat and non-basmati rice.
The former RBI governor further said that if required, the government should not hesitate to import food items.
“Any article which is important that is not available in the market, we should not hesitate to import food items as quickly as possibly,” Jalan said.
He expressed hope that the decline in food inflation in the week ending June 18 would continue in future as well.