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High inflation due to supply bottlenecks: World bank
Published on 15 Jan. 2011 10:55 PM IST
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Multilateral agency to help India improve agricultural output
The World Bank has attributed high inflation in India to supply bottlenecks and assured its assistance in improving agriculture productivity to cool down food prices, stated Busines Standard.
“My own sense in the case of the Indian economy is that some of the inflationary pressures are more likely a function of some of the bottlenecks on the supply side than from the demand side,” World Bank President Robert B Zoellick said at a joint press conference with Finance Minister Pranab Mukherjee today.
He added helping India improve agriculture productivity and production would be the key priority of the multilateral agency over the next three years.
The two leaders also discussed the global economic situation, rise in commodity prices worldwide, unemployment in advance economies, inflationary conditions in emerging economies and India’s increasing in the global affairs, including G20.
Praising the Indian government’s “prudent” handling of the fallout of the global crisis, Zoellick said India was addressing how economic growth could be used to overcome poverty and meet the growing aspirations of its people, and the World Bank was ready to help Indian people bring about rapid, inclusive and environmentally sustainable development.
Zoellick also called upon Prime Minister Manmohan Singh to learn more about how India was sustaining high growth, while simultaneously striving to ensure the most vulnerable people also avail the opportunities afforded by increased growth.
Finance Minister Pranab Mukherjee said India was aiming for double-digit growth with moderate inflation and fiscal prudence policies.
Reacting to the World Bank’s projection that the Indian economy would grow faster than that of China in 2012, he said India was not in competition with anybody.
“India is trying, but I’m not competing with anybody… We want to reach double-digit growth and, at the same time, have a modest rate of inflation without indulging in fiscal prolificacy,” Mukherjee said at the joint press conference with the World Bank chief.
In its latest report on Global Economic Prospects, the World Bank has projected Indian economy to grow by 8.7 per cent in 2012, faster than 8.4 per cent expected for China on purchasing power parity basis.

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