Pinning hopes on the expected good monsoon this year, Prime Minister Manmohan Singh on Monday said food prices will soon come down and consequently inflation would ease to six per cent by December. Inflation currently is in double digits.

In his concluding remarks to the National Development Council (NDC) meeting, he also informed that he has constituted a sub-committee of NDC under the chairmanship of Union urban development minister S. Jaipal Reddy to look into various aspects and bottlenecks confronting urbanisation process and asked it to submit the report within a period of 12 months. He has also asked the Planning Commission to work out an integrated water policy on the lines integrated energy policy for better use of scarce water resources in the country.
“We expect to see the rate of inflation in wholesale prices to come down to around 6 per cent by December,” Dr Singh said while inaugurating the NDC meeting, the highest policymaking body comprising chief ministers and the Planning Commission. Dr Singh, however, regretted that states were not paying due attention to farm sector, crucial to curbing inflation. “This must be corrected if we want to achieve a broad-based improvement in living standards in rural areas. Better agriculture performance is crucial for food security and would help in tackling the problem of inflation... Present high rate of inflation is mainly due to food price inflation,” he said.
The Opposition-ruled states, however, countered the PM’s contention claiming that it was the Centre that had failed in tackling inflation and that rising prices was making life difficult for the common man. “Inflation poses a great threat to the country’s development. In fact, there is a real danger that inflation, if not effectively tackled, could derail the entire growth process,” Gujarat chief minister Narendra Modi said. Uttarakhand chief minister Ramesh Pokhriyal said, “States can act on hoarders only when food grains are available. When there is shortage of food grains in states, what can we do?”
Meanwhile, Dr Singh said, “Several chief ministers suggested that we constitute a committee of the NDC to go into the complex challenges of urbanisation and provide a direction to our future efforts. I propose to constitute a sub-committee of NDC under the chairmanship of S. Jaipal Reddy.” Touching upon the issues concerning water resources, Dr Singh said, “It is clear that we need to have an integrated approach in managing India’s scarce water resources. I have asked the Planning Commission to prepare an integrated policy for water resource management, which could be discussed in the next NDC meeting.”
On growth, Dr Singh said though the economy would expand by 8.1 per cent annually during the 11th Plan period (2007-12), it would still be the highest ever achieved by any Plan.
The Prime Minister further stressed that failure to implement laws like the Forest Rights Act and PESA (Panchayati Raj — Extension to Scheduled Areas Act) “reduces credibility of our commitment to bring development to these areas”. The Planning Commission, he added, will design a holistic development plan for Naxal-hit areas in consultation with the states.