The current monsoon conditions pose a risk of higher prices for pulses,a key driver of food inflation,Reserve Bank of India (RBI) deputy governor Subir Gokarn said on Saturday.
We had a huge protein shock in 2009-10. That was mainly on account of a sharp increase in prices of pulses consequent to the monsoon performance of 2009. We are in a similar monsoon situation now and so the risk of pulses prices accelerating is high right now, said Gokarn,delivering a talk at an institute here.
Its clear that despite periodic shortfalls in terms of actual production,cereal prices have not played a very important role in food inflation over the past few years. The driver seems to be largely from protein sources and that may reflect the importance of the role that stocks play in dampening price volatility, said Gokarn.
He added that economic growth of the country has been characterised by the variability of the industrial sectors performance: Experience of high and low economic growth phase in the Indian context is typically characterised by the variability of the industrial sector,though relatively it has a small share.
Meanwhile,amid widespread demand for a reduction in interest rates by banks,RBI deputy governor HR Khan on Saturday said rate cut cannot be predicted at this moment. You cannot say when the rate cut will come. Wait for our September policy, said Khan.
The central bank is scheduled to review its monetary policy on September 17. (With PTI)