Subir Gokarn advocated the urgent need for the government to increase the productivity of proteins, fruits and vegetables.
Reserve Bank of India (RBI) deputy governor, Subir Gokarn, has advocated the urgent need for the government to increase the productivity of proteins, fruits and vegetables to control the current food inflation.
He said inadequate rainfall in the cereal producing, central parts of India in the last three decades and rise in farm labour cost are also contributory factors.
Gokarn was delivering the Kale Memorial lecture at the foundation day of the Gokhale Institute of Politics and Economics in the city on Friday.
Speaking on ‘food inflation: this time it is different’, Gokarn compared the present-day food inflation to the situation of the late 60s and early 70s. According to the RBI official, the drivers for the food inflation in the 60s and the 70s were cereals and sugar, while in the present scenario it was proteins, fruits and vegetables.
According to Gokarn, prices rise because demand grows strongly and supply stagnates. “In such cases, there is no alternative but to raise the supply rapidly,” he said, adding that this was challenging as the quantum of rainfall in the cereal producing, central parts of India had reduced in the last three decades.
Gokarn cited the example of Green Revolution, when the state had intervened on various fronts offering price incentives, input subsidies, technological inputs and infrastructure investments which had resulted in stabilising the productivity of cereals. He said that the present food inflation would have to be tackled differently.
Gokarn explained how increasing affluence in the country had resulted in more people having the financial muscle to afford proteins, fruits and vegetables in their diet.
“The absence of a strong supply response means that many aspiring consumers are actually being denied the opportunity to make the transition,” he said.
Earlier in the evening, 30 students who completed their two-year, postgraduate course in economics were presented degree certificates by Gokarn at the convocation function of the institute.
Sandeep Kumar Baranwal, who stood first in the order of merit, bagged a record three prizes —Pandurangi, MV Namjoshi and RM Agnihotri.
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