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Wednesday, May 26, 2010

Food inflation to come down to 4-5% by Nov: Abhijit Sen

Planning Commission Member Abhijit Sen today said food inflation is expected to decline to 4 to 5 per cent by November from the current over 16 per cent after the arrival of Kharif (summer) crops.

Sen also noted that farm sector growth would be revised upwards to 0.2 per cent in 2009-10 from the earlier estimate of minus 0.2 per cent.

quot;Prices have started falling from March after good Rabi arrival. For some commodities like onion and potatoes, the fall is very sharp. But overall prices are very high. After Kharif season, prices will start coming down," Sen told reporters.

"It's quite possible food inflation will come down to 4-5 per cent by November this year," he added.

Experts had predicted a drop in food inflation with the arrival of Rabi crops in April. However, food inflation has continued to rise and surged to 16.49 per cent for the week ended May 8, mainly due to high prices of vegetables and fruits.

Earlier this week, Prime Minister Manmohan Singh had also exuded confidence that overall inflation would come down to 5-6 per cent by December.

On farm sector growth, Sen said growth is likley to be 0.2 per cent in 2009-10 due to upward revision in production in third advance estimate.

"In 2010-11, the farm sector growth is likely to be 5-6 per cent if met department forecast on monsoon comes true," he added.

In the thrid advance estimates released recently by the Agriculture Ministry, foodgrains production has been revised upwards to 218.19 million tonnes from 216.85 million tonnes quoted in the second advance estimate released in February.

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