By SUNIL Sonkar

NEW DELHI, India: Food prices still will remain high in short run as the government expects the supply-side constraints to continue due to a drop in the summer farm output because of the poor monsoon and floods in some parts of the country. The finance ministry said this in its mid-term review. The ministry also hoped to stem spiralling prices through the imports.

The mid-term review also pointed out that due to the base effect the inflation is appearing higher than what it is.

It stated, “The decline in the base is giving some boost to current inflation figure. This, coupled with the rise in price, which is indeed taking place, makes the inflation appear somewhat larger than it is.”

The review also mentioned that the various poverty alleviation programmes of the UPA government have raised the purchasing power of the people and has resulted in the increased demand for various food items.

The review of the ministry also said that the programmes of the government like Sehri Rozgar Yojana and the Antyodaya Scheme were launched aiming benefiting those people who are below the poverty line and the welfare schemes like NREGA have also put money in pockets of people in the rural areas.

This is a 10-year high in food prices at nearly 20% in the week ended December 5. In the month of November the rising food prices have contributed faster-than-expected 4.78 per cent rise in the wholesale price index.