Need to bring Indian inflation to global level

Mumbai, Apr 27 | Updated: Apr 28 2007, 08:14am hrs
The Reserve Bank of India (RBI) governor YV Reddy has emphasised the need of bringing the Indian inflation level to global level integrating in order to integrate the Indian financial system with the global financial system.

Reddy while delivering the inaugural address at the international conference on Emerging Challenges to the Indian Financial System, that the average annual inflation during the last four years is around 5% despite the period being marked by oil shocks, foodgrains price rise. According to him, 4% target in the medium term in the annual policy statement is achievable. He lauded the substantial structural reform in the financial system that has strengthened the system. During the last four years, around 98% of the investments in the country is financed by domestic saving, explained the governor. And there are good reasons to believe in self-accelerating growth, he added. Referring to the excess credit delivery in certain sectors of the economy, he said, We must keep the rebalancing of portfolio a priority keeping in mind the fact that some sectors of the economy are growing too fast.

Nevertheless the aggregate demand is strong and we face a peculiar combination of discouraging advances to some sector and encouraging credit to some sectors which will augment supply, said Reddy.

The financial sector reform should be such that it must touch the life of every citizen and the Indian financial system is moving with its inherent momentum and efficiency, he said.