"While we did well to protect incomes, we have been less successful on food prices," the prime minister told a conference of chief ministers here, convened specifically on the issue of tackling rising prices, especially of essential commodities.

"Let me say, in the end, that I believe the worst is over as far as food inflation is concerned," the prime minister added, while outlining the steps taken by his government to tackle prices, such as additional food allocation for distribution through fair price shops.

"Food prices have softened in recent weeks and I expect this to continue." From a longer-term perspective, Manmohan Singh wanted much more attention on factors that result in low productivity. "It is well known that for many crops, including pulses, which are in short supply, large increases in yield per hectare is possible."

At the same time, the prime minister also urged state governments to invoke their respective Essential Commodities Maintenance Act to prevent hoarding and take strict action against those creating artificial scarcity and fanning inflationary expectations.

He also said chief ministers must remove all existing curbs on the processing of imported raw sugar, as some states like Uttar Pradesh had banned the entry of raw sugar into mills. The prime minister also said that the public distribution system also needed to be strengthened on an urgent basis.

"I think that our distribution system is hopelessly outdated and needs complete overhaul. The state governments should give focussed attention on developing marketing intervention mechanisms which can act as supplement to the public distribution system." The day-long meeting came against the backdrop of India's annual food inflation ruling sharply higher at 17.56 per cent, with prices of potatoes and pulses nearly 50 per cent higher over the past year, rice up 11 per cent, wheat 16 per cent and milk 14 per cent.

The chief ministers' conference also comes a day after Agriculture Minister Sharad Pawar came in for criticism at the Congress Working Committee (CWC) meeting here with some of the members raising questions over his remarks pre-empting price rise in some items.

Congress party sources said though no member named Pawar directly, they said his remarks about possible rise in prices of some essential commodities such as sugar and milk were unwarranted and against the government's agenda of reassuring people. Chief ministers of many states that are not under Congress party-led governments came down heavily on the issue of price rise, with Karnataka's B.S. Yeddyurappa saying it was unfortunate the states were being blamed for the federal government's inaction.