Won't Be Surprised If Retail Inflation Goes Back To 10%: Ashok Gulati

Noted agricultural economist Ashok Gulati has warned that retail or consumer inflation could hit 10 per cent in coming months unless the government takes steps to check the price rise. Mr Gulati, who is Infosys chair professor for agriculture at ICRIER, says prices of several essential commodities are rising over the last few months and they will continue to rise till next kharif crop comes into the market. 

The government needs to streamline its policies if it wants to avoid a situation with retail inflation hitting 10 per cent in the next 3-4 months, he added.  

According to recently released inflation data, food inflation in May spiked in both retail as well as wholesale markets. Food prices in the retail market rose to 7.55 per cent in May as compared to 6.32 per cent in April. Wholesale food prices jumped to 7.88 per cent from 4.23 per cent in April.  

The situation in June is no different as well, with the prices of tomatoes more than doubling in last one month and being sold at nearly Rs 100 a kg in Hyderabad.  

The prices of pulses and other vegetables are also going up. Even sugar prices have been increasing over last few months. 
According to Professor Gulati, the government needs to relook at food polices. ''There is a major contradiction in government's policy, they allow imports and then don't allow traders to hold any stocks,'' he says.  

He cites this as one of the reasons why prices of sugar and pulses have moved higher. 

According to government sources, Finance Minister Arun Jaitley today has called for a high-level meeting to discuss the issue of price rise. Hopefully some solution would come up today.