Government is trying to cut down food grain prices: Mukherjee

Kolkata, July 17 (ANI): Finance Minister Pranab Mukherjee said on Sunday that the hike in prices of foodgrains was due to some obvious reasons, but the government was still trying to bring it down.

Talking to mediapersons here, Mukherjee said the price of lentils rose because India's consumption is more than its production.

"The prices of foodgrains have been due to some obvious reasons. For the last eight months, the price of rice and wheat is steady. Earlier the price of dal (lentils) had increased because India doesn't produce as much as it consumes. India needs 19 million tonnes, but production is only 14 million tonnes. But this year, the production of dal has increased," said Mukherjee.

Mukherjee added the government collects a third of the total production, which sets the benchmark price of foodgrains.

"The support money of one quintal rice was Rupees 600 and now it is Rupees 1,100 per quintal. Government collects a third of the total production, which sets the benchmark price of foodgrains. These are the reasons for the foodgrain price hike, but we are still trying to cut down the price," added Mukherjee.

India's food price index rose 9.16 percent this year till June 11, government data showed on Thursday (June 23). In the previous week, annual food inflation stood at 8.96 percent.

Food articles have a weight of little over 14 percent in India's inflation basket.

The record food grain produced during farm year July 2010 to June 2011 was 23 million tonnes more than the year before. However, the demand is set to rise with population growing at nearly 1.8 per cent annually.

The government has recently lifted the four-year old ban on wheat exports, even as shipment of the grain is not viable at current global prices.

The government had banned wheat exports since 2007 to boost domestic supply and contain inflation. (ANI)