PM on why persistent inflation is a cause of concern

Admitting that persistent inflation, especially in the food sector, is a cause of concern, Prime Minister Manmohan Singh on Thursday emphasised on increasing the country's agricultural production to enhance food security.

"We have to make a concerted effort to enhance our food security. . . Our economy has been in reasonably good shape in the past seven years. We have achieved an impressive rate of growth, which we were able to sustain even in the midst of the worst global financial crisis of recent times.

"However, during the past year and a half, persistent inflation, especially in the food sector, has become a cause of concern," Singh said at the inauguration of Civil Services Day in New Delhi.

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The government's consistent policy has been to control inflation without hurting growth, Singh said, emphasising that "we have strived for a delicate and difficult balance to achieve this."

Food prices have been on upswing since the drought in 2009, which affected the agriculture output.

Although the situation has improved in recent months, with food inflation coming down to single digit levels, the long-term solution lies in increasing production and productivity in the agricultural sector, Singh said.

Food inflation for the week ended April 9 reversed the declining trend for three weeks, rising by 8.74 per cent as against 8.28 per cent in the previous week.

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On monthly basis, food inflation for the month of March was recorded at 8.98 per cent, higher than the Reserve Bank of India's target of 8 per cent.

"The needs of a growing and increasingly more prosperous population can only be met by enhanced production of a diversified basket of agricultural products," he said while

pointing out that the Civil Services again have a major role to play in achieving a higher rate of growth in the farm sector.

"I hope you will pay more focused attention to this area, and more specifically to the preparation and implementation of district level agricultural plans," he said.

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With monsoon likely to be normal this year, the Planning Commission is hoping to achieve the targetted four per cent or more growth in the farm sector.

This will be crucial to achieve overall nine per cent economic growth in the current financial year.

The Prime Minister also took the opportunity to lay stress on the importance of strengthening local level governance through panchayats and municipalities.

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"Our country is too large to be governed effectively from the Centre or even from the state capitals. We have to decentralise power, decentralise decision-making and

decentralise the implementation of various development schemes," he said.

"The success of third tier of governance is critical to improved delivery of services and better design and implementation of scheme", Singh said, adding, "our civil servants must do their utmost to facilitate real decentralisation of governance in our country."