Stubbornly high food inflation is a barrier for growth: Subir Gokarn

High and persistent food inflation, which remained around double-digits despite several rate hikes in past two years, has been a barrier for the India's economic growth, said RBI's deputy governor Subir Gokarn on Tuesday.

"High and persistent food inflation is a barrier for growth," he said at the 33rd memorial lecture of Frank Moraes organised by United Writers' Association here.

His statement came at a time when government has been taking various reform measures to compliment RBI's efforts to reduce interest rates and spur growth in the economy.

"The focus has to be on the domestic policies," he said. However, he also added that the impact of growth-friendly policies in creating jobs has been diluted due to lack of skill and labour laws.

Indian economy, battered by high interest rates, inflation and a global slowdown, grew by just 5.3 per cent in January-March quarter-- the lowest growth rate in nine years.

On the edge of missing the fiscal deficit mark again this year, the Indian economy has been continuously reminded of rating downgrade by various rating agencies who have felt that twin deficits were the country's biggest worries.

Read more about: inflation
Story first published: Wednesday, October 3, 2012, 9:31 [IST]
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