Higher wheat output = more inflation

What are the implications of the government’s surprising pronouncement that Indian wheat output of 2014-15 will be around 100 million tonnes? Believe it or not, it is more inflation. The questions to be asked are: Is this a reliable estimate? Will the farmer be getting a “market premium” over and above the minimum support price? How much will the Food Corporation of India and its agencies acquire for PDS? And, will this order of output tame wheat inflation or stimulate exports?

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