BANGALORE: Reserve Bank of India (RBI) Deputy Governor Dr Subir Gokarn on Thursday said that public spending is gradually declining, which will lead to more private investment - a good sign of economic growth.In his lecture that was organised by the Federation of Karnataka Chamber of Commerce and Industry on inflation and growth, Gokarn said, the present situation is not because of mismanagement but because of the global crisis.According to him, low inflation is always associated with high growth rates. Therefore, efforts are being made to keep inflation, which is presently hovering at around 7 per cent, in check as it leads to higher production costs.“Higher growth rates have led to higher inflation in the Indian markets as the growth rates have exceeded our capacity to grow,” he said.“Though our fiscal deficit is at 4.7 per cent of the GDP it is slightly above the budgeted deficit of 4.6 per cent, borrowings are within the budgeted limit of `3 lakh crore, which is good.” He added that the recent global developments has led to pessimism. Due to the liquidity factor the investments in oil has increased considerably leading to an increase in oil prices and commodities.Despite all these factors, India is on the track to achieve projected growth rate of 9 per cent. Gokarn added that prices of gold and silver will remain high till the global markets stabilise.
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