BANGALORE, Aug 18: Reserve Bank of India Deputy Governor Subir Gokarn today said acceleration of industrial growth held the key for higher economic growth and also indicated that price of pulses would go up because of poor monsoon.
Addressing the seventh annual international conference on public policy and management, organised by the Indian Institute of
Management Bangalore here , he said the ‘dream run’ of high economic growth during 2003-2008 was mainly due to sharp acceleration in industrial sector.
He pointed out that the services sector has not shown a great deal of variability over time and its growth had remained fairly constant and stable.
Mr Gokarn said experience of high and low economic growth phase in the Indian context is typically characterised by the variability of industrial sector although relatively it has a small share.
He said that proteins (pulses, milk, meat, fish and eggs) are the one important characteric of food inflation.
‘We had a huge protein shock in 2009-10….That was mainly on account of a very sharp increase in pulse prices because of the consequent of monsoon performance of 2009.
“We are in a similar monsoon situation now.
“And so the risk of pulse prices accelerating is high right now,’ he added.
He also pointed out that cereal prices have not played a very important role in food inflation at all in the last few years. (UNI)
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