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Industry growth crucial to economic growth, says Gokarn

BS Reporter/Bangalore 19 Aug 12 | 12:24 AM

The growth of industrial sector was crucial to the overall growth in the Indian economy, said Subir Gokarn, deputy governor of Reserve Bank of India (RBI).

“Experience of high and low economic growth phase in the Indian context is typically characterised by the variability of the industrial sector although relatively it has a small share," Gokarn said while addressing the seventh annual international conference on public policy and management organised by the Indian Institute of Management, Bangalore (IIMB), here on Saturday.

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Referring to the dream run of high economic growth during the period 2003-2008, he said acceleration in industrial production drew the economic growth during the period. While the services sector has not shown any significant variability over the time, it has remained more or less constant and stable, added Gokarn.

Commenting on the agriculture sector growth, Gokarn said, “We had a huge protein shock in 2009-10, which was mainly on account of a very sharp increase in pulse prices because of the monsoon performance of 2009. We are in a similar monsoon situation now. And so, the risk of pulse prices accelerating is high right now," he said adding that cereal prices have not played a significant role in food inflation over the last few years.

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