Arun Jaitley Holds Emergency Meet on Inflation

A day after Finance Minister Arun Jaitley said India is committed to easing bottlenecks that have caused inflation to spike, he held an emergency meeting on rising prices.

"Series of steps have been decided to curb price rise. Additional quantities of rice will be released into the market. Will import pulses if there is a shortage. Cereals and edible oil can be imported if states feel there is a shortage," Mr Jaitley told reporters after the meeting.

Commerce Minister Nirmala Sitharaman and Food Minister Ram Vilas Paswan were in attendance, among others.

The government is monitoring prices of 22 commodities and a price increase in 4-5 commodities has been noticed, Mr Jaitley said.

Prime Minister Narendra Modi was elected amid widespread anger about rising prices and has made tackling inflation his top priority.

Mr Jaitley said state governments are being advised to delist fruits and vegetables from the Agriculture Produce Marketing Committee (APMC) Act.

The delisting will give the farmers freedom to sell their produce directly to consumers, without the perishables being routed through mandis or middlemen.

The Commerce Ministry will soon fix the minimum export price for potatoes, Mr Jaitley said. Earlier on Tuesday, the government set a minimum export price for onions of $300, or Rs 18,000, per tonne to discourage overseas shipments amid an inflation scare that threatens to stoke public anger over rising prices at local food markets.

India's wholesale price inflation rose to a five-month high in May, adding to worries that disappointing rains could lead to higher food prices and turmoil in Iraq could cause a spike in global oil prices.

Wholesale prices in May rose a faster-than-expected 6.01 per cent, driven mainly by higher food and fuel costs, government data showed on Monday.

"The rise in prices of food articles can also be attributed to withholding of stocks on account of apprehension of a weak monsoon," Mr Jaitley said in a post on Facebook late on Monday.

"The State Government(s) should take effective steps to ensure that speculative hoarding is discouraged," he said.

Mr Jaitley is due to deliver his first budget in July and must balance a commitment to fiscal discipline with the government's aim of rapidly reviving economic growth.

The government "is committed to take measures which will positively impact the GDP and result in higher growth than expected. I am hopeful that the inflation which is moving upwards now would eventually come down," he said on Monday.

Over the weekend, Prime Minister Modi warned that "bitter medicine" was needed to put India's economy back on track, without giving details.

India's economy is witnessing its worst slowdown in 25 years, after it grew at sub-5 per cent for the second year in a row in the fiscal ended March 2014.