WE SHOULD BE SENSITIVE TO THE PROBLEMS OF POOR

RBI Governor D Subbarao said inflation cannot be tamed without some sacrifice on the growth front. "Some sacrifices in growth is inevitable when you are trying to bring down inflation. But that sacrifice of growth is only in the short term...it is somewhere incorrect to see it as the tension between growth and inflation as hundreds of millions of people are hurt by inflation," he added. Delivering the 5th R Venkataraman Endowment Lecture in Chennai today he further said though wholesale price-based inflation had come down from double digits to below 5 per cent, retail inflation is still close to double digits, mainly because of some cyclical reasons and distribution problems. The dilemma before the RBI, he said, is to achieve three objectives --controlling inflation, promoting growth and ensuring financial stability -- at the same time. It is also the job of the RBI to listen to "silent voices of poor people" who are impacted the most by rise in inflation, particularly of food items. "It is the responsibility of the Reserve Bank as a public policy to be sensitive to the silent voice of the poor people in the country. And that's my most important argument in support of controlling inflation," said Subbarao who will be demitting office in about five weeks. "There has been some criticism in this context that RBI is obsessed in controlling inflation regardless of growth concern. I don't agree with that at all. I don't agree with the contention that RBI is obsessed with inflation. RBI believes in price stability, RBI believes in growth, RBI believes in financial stability," Subbarao said.