<p>He also said that fiscal deficit was a cause for concern. "Fiscal deficit is a cause of concern. <br /><br />Fiscal situation needs to be consistent with economic scenario. We are exiting from a crisis management position to raising rates and by increasing liquidity," Gokarn said at a discussion on 'Global forces and domestic policy consideration - Indian perspective'.<br /><br />Finance Minister Pranab Mukherjee had proposed in the Union Budget to bring down fiscal deficit to 4.6 per cent of GDP this fiscal from about 5 per cent in 2010-11.<br /><br />On inflation, Gokarn said that fuel is now a significant contributor to inflation, adding that high energy prices will put pressure on the central bank's strategy of inflation management.<br /><br />On steps to control it, Gokarn said the Budget outlined steps to bolster the output of protein sources, including lentils and milk would help to manage supply-side.<br /><br />India's inflation decelerated slightly to 8.66 per cent in April from 9.04 per cent in the previous month, but remains above the RBI's comfort zone.<br /><br />Gokarn said commodity prices will not go up sharply but are unlikely to see a steep fall, adding that food inflation is a great concern.<br /><br />The rise in widely traded commodities like oilseeds and sugar have some implications on inflation, he said, adding that the commodities have become an asset class.<br /><br />Gokarn also called the Government's articulation about the change in food consumption patterns to fruits and protein-rich food as a step in the right direction, as such items have been fuelling food inflation.<br /><br />Gokarn said even though India's economic growth rate is reassuring, the slowdown in investment activity is not desirable. <br /><br /><br /></p>
<p>He also said that fiscal deficit was a cause for concern. "Fiscal deficit is a cause of concern. <br /><br />Fiscal situation needs to be consistent with economic scenario. We are exiting from a crisis management position to raising rates and by increasing liquidity," Gokarn said at a discussion on 'Global forces and domestic policy consideration - Indian perspective'.<br /><br />Finance Minister Pranab Mukherjee had proposed in the Union Budget to bring down fiscal deficit to 4.6 per cent of GDP this fiscal from about 5 per cent in 2010-11.<br /><br />On inflation, Gokarn said that fuel is now a significant contributor to inflation, adding that high energy prices will put pressure on the central bank's strategy of inflation management.<br /><br />On steps to control it, Gokarn said the Budget outlined steps to bolster the output of protein sources, including lentils and milk would help to manage supply-side.<br /><br />India's inflation decelerated slightly to 8.66 per cent in April from 9.04 per cent in the previous month, but remains above the RBI's comfort zone.<br /><br />Gokarn said commodity prices will not go up sharply but are unlikely to see a steep fall, adding that food inflation is a great concern.<br /><br />The rise in widely traded commodities like oilseeds and sugar have some implications on inflation, he said, adding that the commodities have become an asset class.<br /><br />Gokarn also called the Government's articulation about the change in food consumption patterns to fruits and protein-rich food as a step in the right direction, as such items have been fuelling food inflation.<br /><br />Gokarn said even though India's economic growth rate is reassuring, the slowdown in investment activity is not desirable. <br /><br /><br /></p>