New Delhi: Addressing the Conference of Chief Secretaries in New Delhi, Prime Minister Manmohan Singh on Friday said that monetary tightening together with difficult global economic environment has impacted rate of growth adversely.
Hailing as "creditable" the growth rate of the country's economy at the rate of 8.4 per cent in the backdrop of a crisis-ridden world economy, Singh said that the growth in the current financial year is, however, likely to be lower between 7 to 7.5 per cent in a large measure due to the continuing uncertainty in the global economic environment.
While noting that inflation was a persistent problem during the course of last year, particularly with regard to food items, the Prime Minister said the government took several measures to ease supply constraints that were a cause for rising prices.
"This coupled with the policy of monetary tightening that the Reserve Bank adopted has led to a continuous decrease in inflationary pressure in primary food articles in recent weeks.
"The overall inflation has also eased. But, monetary tightening together with a difficult global economic environment, particularly the lingering Euro Zone crisis, has impacted the rate of growth adversely", he said.
Singh said that the key to controlling inflation in food articles on a sustainable basis lay in increasing agricultural production and productivity in which the "state governments have a crucial role to play".
He also urged states to give more attention to areas such as modernisation of agricultural research and agricultural extension system, public investment in agriculture, and reform of the agricultural marketing system and practices.
The Prime Minister felt there was a need to review and amend the Agriculture Produce Marketing Act to enable farmers to bring their products to retail outlets and also allow retailers to directly purchase from the farmers.
He said this would bring better remuneration to farmers, check wastage and allow competitive prices to prevail in retail markets.
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