High food prices: A coin with two sides?

A substantial part of the increase in today's inflation figure has been a rise in food prices.

 Speaking to CNBC-TV18's Vivian Fernandes, Planning Commission Deputy Chairman, Montek Singh Ahluwalia says he sees high food prices as a coin with two sides - beneficial to farmers, detrimental to consumers. "Most of the people in the urban areas have been very large beneficiaries of the kind of growth that we have seen in the economy and the way to look at the current inflation control measures is that of course, in the short run, some of these measures will hurt but the purpose of these measures is to bring inflation under control so that the sustained growth process can continue. Failure to control inflation would jeopardize the growth process and that’s not in the interest of the economy and certainly not in the interest of the modern part of the economy because which has benefited the most."

Singh said, "A rise in food prices is a favourable to some and not favourable to others. In the case of fuel prices, it is unfavourable to the country in the sense that the country has to pay and the beneficiaries are outside. The issue really is who in the country should bear the biggest burden and of course we are trying to spread it across different groups."