India food inflation likely to be around 8.5pc

NEW DELHI, Apr 24 (The Economic Times): Food inflation is expected to hover around 8.5 per cent in the remaining months of 2011, if the monsoon remains normal as predicted by the meteorological department, according to a report. Normal monsoon would enhance farm production and enhance purchasing power of farmers which could push sales of FMCG and automobiles by 25 to 30 per cent, SMC Global Securities said. "Good monsoon will definitely bring stability in food inflation at about 8.5 per cent for the rest of the year and create aspirations for higher agricultural growth of over 4 per cent," SMC Global Securities Ltd Chairman & Managing Director Subhash Aggarwal said. It wants Union and states governments to introduce reforms in agriculture sector through measures such as scrapping of Agriculture Produce Marketing committees which, it says, gives virtual monopoly to buy crops to certain traders.