Pranab Mukherjee attributes rising food inflation to high onion prices

Attributing steep rise in onion prices as one of the reasons for high food inflation, finance minister Pranab Mukherjee today said government is taking steps to check price rise.

"I am afraid as there has been some upward movement of food items, certain other items in WPI inflation index. Of course the weekly fluctuation takes place and one of the reasons may be the high prices of onions, for which we  have taken steps," Mukherjee said.

Food inflation rose to 12.13% for the week ending December 11 as prices of onion, milk and vegetables continued to rise. It returned to the double-digit level after a gap of four weeks.

Onion prices have skyrocketed in recent days as Maharashtra, the main producing centre, saw the crop damaged due to unseasonal rains.

The wholesale onion prices rose 4.56% during the week ended December 11.

"(Onion) exports have been banned, import duty has been reduced to zero and I understand that imports are also being organised so that availability will be there," Mukherjee said.

Continuing battle against onion prices, which touched Rs 70-80 a kg in the last few days, a Committee of Secretaries, headed by the cabinet secretary KM Chandrasekhar, met this morning to take stock of the situation.

Yesterday, the government undertook multi-pronged measures to check high onion prices.

This included removal of import duties, an indefinite ban on exports and asking state agencies MMTC, STC and PEC to import the commodity.