Admitting that food prices have soared 'excessively', Planning Commission Deputy Chairman Montek Singh Ahluwalia said Tuesday that they would decline in January. 'In January, you will see a decline in food prices,' Ahluwalia told a Confederation of Indian Industry (CII) meeting through video-conferencing from New Delhi.

Expressing grave concern over the stiff increase in the prices, he said: 'Some increase was expected, but prices of vegetables and other food items have gone up excessively.' He said the fact that retail prices had gone up more than wholesale prices showed there was 'some dysfunctionality' in the distribution system.

'Where we can, we should import. But again, if the import prices are high, the government has to give subsidy. And then the farmers would say they are not getting good prices for their products. So we have to do a balancing act.'

He opined that the food prices have seen a speculative rise due to the drought situation. 'This has happened though the drought did not have the effect it was supposed to have. We have adequate stocks,' Ahluwalia said.