The government on Monday ranked insulating the common man from inflation as its top priority, though cautioning that rise in food prices was inevitable given the shortfall in farm production and global crisis.
In her address to both the houses of Parliament, President Pratibha Patil said the economy will grow by 7.5 per cent this fiscal and over eight per cent in the next, but was silent on the government’s stance on withdrawal of stimulus measures that has triggered a debate in the face of economic revival.
Only last week, the Prime Minister’s Economic Advisory Council sought partial withdrawal of stimulus measures and return to fiscal consolidation – a view echoed by Planning Commission Deputy Chairman Montek Singh Ahluwal
“Higher prices were inevitable given the shortfall in domestic production and prevailing high prices of rice, cereals and edible oils globally,” Patil said.
Food inflation had touched a decade’s high of about 20 per cent in December last year and is now near 18 per cent.
Opposition parties, agitated over high food prices, have made clear their intent to corner the government on prices.
The President’s address lists the priorities and policies to be followed by the government in the coming fiscal, and comes ahead of the Union Budget on February 26.
The economy, Patil said, is expected to grow by nine per cent in 2011-12. Growth had dipped to 6.7 per cent last year from over nine per cent in 2007-08.
“While we were able to avert any threat to our food security, there has been an unhappy pressure on prices of foodgrains and food products…