Revising the Agriculture Produce Market Committee Act ( APMC Act), encouraging competition among traders and promoting efficiency in retailing are some of the steps needed to calm food inflation. These views were discussed in the second meeting of a interministerial group appointed by Prime Minister Manmohan Singh to review the inflation situation and suggest corrective measures, according to a statement issued by the finance ministry.
Kishore Biyani, chairman of retail major Future Group, said there was a huge value erosion as commodities passed through various supply chains and procedures. He said this could be avoided through better postharvest management techniques such as sorting, grading, crating and packing.
High food prices have emerged as a major policy bottleneck for the government and the Reserve Bank of India (RBI). Both the government and the RBI have taken several steps including raising interest rates to tackle some aspects of price pressures. After spiraling to 18.32% in late December, food inflation has moderated in recent weeks but still remains high.
The government is discussing the issue of allowing greater foreign investment in the retail sector.