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New Delhi: India needs to be vigilant about rising food prices but achieving a goal of nine per cent economic growth on average over the next few years is feasible, a top economic policy maker said.
Montek Singh Ahluwalia, the deputy head of India's planning commission, said India should consider setting up a sovereign wealth fund to make use of its swelling foreign exchange reserves, although any such move would take time.
Annual inflation accelerated in late February to 5.02 per cent, the highest in nearly nine months and above the five per cent level the central bank wants to contain it at for the fiscal year ending on March 31.
"I think that an inflation rate somewhere between 4-5 per cent, nearer the lower end of that range, is what one can defend. However a lot depends on the composition of inflation," he said.
Food and fuel prices should also be kept under "a modest degree" of control, he said. Food prices overseas were rising but the government had taken steps to keep prices under control and internal food stocks were satisfactory.
Bangladesh: Export ban hits supply
Bangladeshi traders said yesterday that an Indian ban on exports of rice at less than $650 per tonne would cause further volatility in Bangladesh markets, where food grain prices have risen nearly 60 per cent in the past six months.
The ban will particularly affect rice imports by Bangladesh's private sector, which brings in the bulk of grains imported every year to fill the gap between production and demand and to build emergency stocks in the calamity-prone south Asian country.
- Reuters
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