Conceding that persistently high inflation posed a “serious threat” to India's economic growth momentum, the Prime Minster, Dr Manmohan Singh, called for a “paradigm shift in institutional arrangements”, including the need to shore up farm supply chains by bringing in organised retail players.

Speaking at the Second Annual Conference of Chief Secretaries on Friday, Dr Singh made a strong case for waiving mandi tax, Octroi and local taxes, which impede the smooth movement of essential commodities.

“Inflation poses a serious threat to the growth momentum… Whatever be the cause, the fact remains that inflation is something which needs to be tackled with great urgency,” he said in his address.

Describing the problem of high inflation as one driven mostly by supply-side shortages, Dr Singh said a lasting solution for food price inflation lay in increasing farm productivity and output, not only of cereals, but of pulses, oilseeds, vegetables and fruits.

Besides, he said, there was a need to augment the supply of milk and milk products, poultry, meat and fish, which were the key contributors to the latest bout of inflation.

Dr Singh stressed the need for a shift in institutional arrangements, for improving the availability of commodities to meet rapidly increasing domestic consumption.

Related Topics