RBI Governor Shaktikanta Das argues that lower inflation benefits farmers as consumers. He emphasizes the need for a balanced approach to benefit both farmers and consumers.
Photograph: ANI Photo
Mumbai, Jun 25 (PTI) Amid a debate over the possible disenchantment among agriculturists because of the policy focus on arresting price rise, RBI Governor Shaktikanta Das on Tuesday said lower inflation is also beneficial to the farmers.
Policymakers always grapple with the dilemma of balancing out between multiple objectives, and keeping the agricultural produce prices low to serve the consumers while depressing the farmers' incomes is one such conundrum, Das said addressing a Bombay Chamber of Commerce and Industry event here.
"Let us also remember, that the farmer is also a consumer. Apart from wheat, he buys so many other things for his day to day living. It is also in the interest of farmers to have a low inflation," he said.
The comments, which come weeks after the election results, assume significance because setbacks to the ruling BJP in some pockets like Maharashtra, where the onion growers were left peeved, have been analysed as a fallout of a pro-consumer stance of the government which suppressed farmer incomes.
Das said any government has to move forward in a "balanced manner", and weigh in the interest of the farmers with that of the consumers.
"It's a complicated and complex task," he said, citing the RBI's own dilemmas on the exchange rate management as one such instance.
He said if the headline inflation comes down from 6 per cent to 4 per cent, it will increase the purchasing power of each of the 140 crore Indians, which will in turn have ripple effects that will benefit purchasing power, consumption, growth and also employment.
The Governor, however, said that there is "still a lot of work" remaining to be done even though there have been some successes.
"A lot of achievements have been made, but agriculture sector there is still a lot of work to be done especially with regard to improvement of the supply chains and the value chain framework," he said.
The governor also said that the sector has become much more climate resilient in recent years.
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