June 11, 2010

India's government has decided to extend the wheat sale in the open market by another three months even as food inflation surged to 16.74% for the May 29 weekending.

Sale of wheat from the overflowing buffer stocks was to close this month end. Now, the sale of wheat under Open market sales scheme (OMSS) will be done until September 30. This has apparently been done to tame the prices of key grains where there is no let up for the common people in India.

Decision to extend the open wheat sale was decided at a meeting of empowered group of ministers (EGoM) headed by finance minister Pranab Mukherjee on Thursday (June 10). The ministerial group reviewed the food prices, stocks and the proposed Food Security bill.

After the eGoM, Planning Commission deputy chairman Montek Singh Ahluwalia said, "It is true that the year on year inflation rate is still quite high and we are concerned about it. It is our expectation that the Wholesale Price Index is likely to fall to 6% by the year end."