RBI listens to "silent voices" hurt by inflation: D Subbarao

SRINAGAR: Dismissing the criticism that RBI's steps to check inflation have hurt growth, Reserve Bank Governor D Subbarao today said the monetary authority has the responsibility to listen to "silent voices" of millions of people impacted by rising prices.

"There is an important constituency in the country that is hurt by inflation. Their voice also needs to be heard. It is the responsibility of public policy institutions like the Reserve Bank to go out of our way and listen to silent voices," he said while addressing students Business School of Kashmir University here.

He said there were millions of people who are hurt by inflation, but they have no avenue to voice their concerns, like corporates and industry associations do.

The Governor said it was incorrect to say inflation has not been controlled. "Inflation has come down significantly. It was in double digits in 2009-10 and has now come down to around six per cent," he said.

Subbarao said the bank had to raise key interest rates 13 times since the global economic recession in 2009 to curb inflation. However, it has started reducing interest rate (repo rate) and last cut it by 0.25 per cent on May 3 to boost growth.

It is impossible to bring down inflation without some sacrifice in growth, he said, adding, "Our endeavour should be to reduce that sacrifice."

He said RBI was sensitive to the people who say interest rate must be brought down.

"We are sympathetic to industry associations and individual corporate who issue representation to the RBI that interest rates have to be brought down," he said.

He said RBI has to strike a balance when it pegs the interest rate as it has to protect interests of both borrowers and depositors.