The Board member of RBI and advocate, Supreme Court of India, Mr H P Ranina indicated that the food inflation owing to increasing demand in food may increase may rise in the near future along with the interest rates. “Both interest rates and food inflation are causes of concern and will take time to ease out,” he said at the CII’s interactive session on Union Budget-2010 impact analysis.

“The food inflation is still going up and it may go up due to widening gap between demand and supply. It has nothing to do with the monetary policies but simply the income of rural population is increasing which is putting pressure on the food supply. There are particular pulses which grow only in India and hence, their demand directly affects the supply side. India is the largest producer of milk and yet the prices have gone up just because of increased demand,” Mr Ranina said.

Expressing views on the commitments proposed in the Union Budget 2010, Mr Ajit Ranade, chairman, CII WR Economic Affairs sub-committee and Group Chief Economist, Aditya Birla Group said, “The reforms like new banking licenses, proposed reforms in the coal sector and fertilizers are encouraging and I wish these commitments are implemented. Reforms in coal auctioning remains very significant as it is directly associated with the energy sector. Besides, India being the third largest coal producer is still importing coal.”
Mr Ranina emphasized on the encouraging growth rate of GDP and said that the country may even achieve 12 to 14% growth rate by 2014. He said that implementation of proposed Goods and Services Tax (GST) by April 1, 2011 and would require a lot of legislative amendments at the Central and State levels to replace the existing tax regimes with GST and the matters are already under discussion with various state governments.