As India develops, problem of high food inflation will get less severe: RBI MPC member Ashima Goyal
The Hindu
RBI MPC member Ashima Goyal discusses how modern supply chains can mitigate high food inflation in India.
The problem of high food inflation will be "less severe" in India going ahead, as modern supply chains with diversified sources can help quickly address sudden spikes in prices of specific food items, RBI Monetary Policy Committee (MPC) member Ashima Goyal said on April 25.
Stressing that the share of food in the household budget is high in India, Ms. Goyal said policy needs to focus on increasing agricultural productivity, since stable agricultural prices are important for non-inflationary growth.
Also Read | Extreme weather may pose risk to inflation, says RBI Bulletin
"As India develops, this problem (high food inflation) will get less severe, for a number of reasons. Modern supply chains with diversified sources respond quickly to large spikes in specific items," she told PTI.
Ms, Goyal further pointed out that one does not hear of tomato or onion prices spiking in advanced economies.
"We naturally have diverse geographic regions, better integrated markets sourcing from different regions can help mitigate climate change induced food price spikes," she said.
Moreover, as the weight of food in consumption falls and food consumption itself becomes more diversified, the impact and size of future food price shocks falls, she noted.
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