Kolkata: Citing increased procurement prices of foodgrain as the reason for the hike in price-rise, Finance Minister Pranab Mukherjee on Sunday assured that the Centre is taking all necessary steps to restrain the runaway inflation.

Invoking the demand-supply mismatch, Pranab said, “The demand-supply mismatch is the reason behind rise in prices of pulses. There are concrete reasons for the hike in prices over the last eight months. However, the prices of rice and wheat have stabilized.”

“India needs at least 19 lakh tonnes of foodgrains in comparison to the currently produced 14 lakh tonnes,” Pranab said adding that the government is taking all necessary steps to arrest the sky rocketing inflation.

 “Earlier, procurement price of one quintal of paddy was Rs 600, now it is Rs 1,100. The central government collects one third of the total foodgrain production. The procurement prices are determining the benchmark of market prices,” Pranab explained.

The Finance Minister however noted that though the food price index in June was 9.16 percent, the annual food inflation was 8.96 percent.