The IMG, headed by Chief Economic Adviser in the Finance Ministry Kaushik Basu, has been asked to firm up an institutional mechanism to read "warning signals" with regard to agricultural production.
The announcement on setting up of the IMG was made on January 13 after Prime Minister Manmohan Singh held discussions with senior ministers at the height of the onion crisis.
The seven-point terms of reference to the IMG include studying trends in international production and stocks, besides reviewing prices of major commodities and making recommendations for fiscal, monetary, administrative measures.
IMG will also review trends in rainfall as Indian agriculture heavily dependent on monsoons.
It will assess the impact of rain on production and stocks and come out with policy suggestions regarding exports and imports of the primary food articles.
Secretaries of Consumer Affairs, Food and Public Distribution, Agriculture and Cooperation, Animal Husbandry, Dairying and Fisheries, and a representative of Planning Commission are part of the group. R N Dubey, Economic Adviser to the finance ministry will be the member secretary.
Its recommendations will be considered by the Committee of Secretaries.
Inflation remains a big worry for both the Reserve Bank and the Finance Ministry. "Now the other issue is inflation, trade balance... these are to be addressed," Finance Minister Pranab Mukherjee said after expressing satisfaction over projection, pegging the GDP growth at 8.6 per cent for the current fiscal.
The overall inflation has remained above the comfort zone of 5-6 per cent for over a year now.
In December, inflation shot up to 8.43 per cent, from 7.48 per cent in the previous month. Food inflation for the week ended January 22 stood at 17.05 per cent.
RBI Deputy Governor Subhir Gokran also indicated that the monetary policies of the central bank will remain "anti-inflationary".