Reserve Bank of India (RBI) governor D Subbarao said inflation would “certainly” decline by the end of this financial year, to an extent that “will provide relief to the common men”.
“I don’t know how much it will come down, but it will certainly decline from the present level of 10 per cent by March-end. I know inflation hurts the common men the most and I am hopeful they will get some relief by March,” he said on the sidelines of a programme at Dongabori village in Morigaon district. He said a “more accurate” figure could be provided closer to March.
He said RBI’s effort was to bring down inflation to seven per cent (wholesale price index) by 2012. When asked why it wasn’t able to tame inflation despite tightening monetary policies, Subbarao said: “Had we not risen to the occasion, had RBI not acted, inflation would have been more by now.”
The governor said food and petroleum prices were the driving force, at present, behind inflation. Adding: “Inflation is a much bigger problem in Assam and the northeast than in the rest of the country, as these states heavily depend on importing goods from outside via roadways.”
Subbarao said all villages in the country with a population of more than 20,000 would have access to banks by March 31. He said 74,000 such villages had been identified and half had been covered till now.
“For banks, this is a big challenge, as the target is quite stiff. But we will make sure at least a banking correspondent is provided to all these villages by March 31. Over time, I hope we will be able to provide at least a weekly bank and, eventually, a full-fledged branch of a bank,” said Subbarao.