Slowing inflation, high vegetable price 'foxed Manmohan'

 The disconnect between rising vegetable prices and slowing inflation has not only troubled humble housewives over the years but also puzzled former prime minister Manmohan Singh who always found it difficult to answer his wife’s queries on the same, writes former RBI governor Y V Reddy in his memoir.

In the book Advice and Dissent: My Life in Public Service Reddy says he too kept searching for answers when his mother asked him, “Venu, why is that the bank is giving me a lower interest rate than before on my deposits?”

She would then say that the bankers had told her it was all because of the Reserve Bank of which he was the then deputy governor.

Reddy would try his best to convince her that she was getting a ‘higher real interest’ rate than before but his answers only left her puzzled.

M Narasimham, who was a former RBI governor himself, once spoke to Reddy about Manmohan Singh’s visit to his home sometime after the latter became the finance minister in the early 1990s.

Apparently, Mrs Narasimham asked, Manmohan, “You say that inflation has come down, but when I buy vegetables, I still have to pay higher prices than before.”

To this, Singh who had himself been an RBI governor, replied, “In fact, my wife Gursharan also asks me the same question. And I tell her that I really find it difficult to answer” reads Reddy’s autobiography.