Budget 2011-12: structural concerns on inflation management

Budget moves to plug structural concerns on inflation management:

With inflation continuing to be one of the key concerns on the policy front, the Finance Minister, announced a doubling up of efforts to address structural concerns on inflation management.

The removal of production and distribution bottlenecks for fruits and vegetables, milk, meat, poultry and fish will be the focus of attention this year, announced in Budget 2011-12.

As a step in this direction, he proposed a full excise duty waiver for equipment used in the food and agro processing industry — including air-conditioning equipment and conveyor belt systems that form part of the coal chain infrastructure in the agricultural, dairy and poultry sectors.

Besides, “fast tracking” augmentation of storage capacity through private entrepreneurs and warehousing corporations, capital investment in creation of modern storage capacity in the eligibility criterion for viability gap funding from the Finance Ministry has been announced.

Admitting in his speech that inflation remained a key concern, Mr Mukherjee exuded confidence that the monetary policy measures taken by the RBI should lead to moderation in inflation numbers in the coming months.

Mega food parks

Other steps taken to address inflation concerns in the medium-to-long term include approvals for 15 new Mega Food Parks during 2011-12, an allocation of Rs 400 crore for improving rice-based cropping system in the Eastern region and another Rs 300 crore to promote 60,000 pulses villages in rainfed areas.

Besides, Rs 300 crore has been provided to bring 60,000 hectares under oil palm plantations, which is expected to yield about 3 lakh tonnes of palm oil annually in five years, he said.

Further, budgetary allocations for the implementation of vegetable initiative to provide quality vegetables at competitive prices, a scheme for promoting higher production of millets such as bajra, jowar, ragi and another to promote animal-based protein production through livestock development, dairy farming, piggery, goat rearing and fisheries, were announced.

Allocation for an Accelerated Fodder Development Programme, which is slated to benefit farmers in 25,000 villages and benefit the dairy industry, was also announced.