v k sharma : launch of the financial literacy project in karnataka welcome address by mr v k sharma, executive director of the reserve bank of india, at the joint function of the reserve bank of india ( rbi ) and government of karnataka on the financial literacy project in karnataka, bangalore, 22 march 2010. * * * 1. on this momentous occasion of the launching of the project on financial literacy in karnataka, it is my honour and privilege to extend a very warm and hearty welcome to respected dr subbarao, governor, reserve bank of india. i also extend a hearty welcome to shri s. v. ranganath, chief secretary, govt. of karnataka, smt. shyamala gopinath, smt. usha thorat, dr. k. c. chakrabarty and dr. subir gokarn, deputy governors, rbi, principal secretaries of the govt. of karnataka. i also take this opportunity to welcome the chairmen and managing directors of all banks, all distinguished invitees and guests, chairman, slbc, karnataka, and other senior officials of the state government, education department officials, senior officials of banks, chairmen of regional rural banks, lead district managers, prize - winning students and their proud parents, other students hailing from semiurban and rural areas and the members of the print & electronic media. 2. three important events have been scheduled for this afternoon. these events, which are jointly hosted by the reserve bank of india and government of karnataka, comprise release of textbooks containing material on financial education in school curriculum, distribution of prizes to the winners of the state - wide quiz competitions and launching of electronic benefits transfer ( ebt ) scheme in karnataka. 3. the background to this momentous event was the decision taken, during the meeting of the respected governor with hon ’ ble chief minister of karnataka, on may 14, 2009 to launch a pilot programme on financial literacy in karnataka in association with the state government. the programme envisaged introducing financial literacy in the curriculum of schools and colleges in the state of karnataka. subsequently, at a high level meeting between shri sudhakar rao, the then chief secretary, government of karnataka and smt. usha thorat, deputy governor, rbi, it was decided that revision of syllabus and content of textbooks for classes v, vii, viii and ix would be carried out for the academic year 2010 – 11. accordingly, the content for the proposed curriculum change

- term inflation expectations are little changed. that said, taken together, the evidence suggests that measures of expected inflation are at the lower end of a range that i consider to be consistent with our price - stability goal of 2 percent pce inflation. while my baseline outlook for growth, employment, and inflation is a positive one, a number of crosscurrents that are buffeting the economy bear careful scrutiny. global growth is slowing, particularly in china and europe. global policy uncertainty remains elevated. and financial conditions have been volatile, making efforts to extract signal from noise more challenging. monetary policy as i have indicated in recent speeches, monetary policy at this juncture needs to be especially data dependent, with the federal funds rate now in the range of federal open market committee ( fomc ) participants'estimates of its longer - run neutral level. moreover, with employment and inflation now at or close to our dual - mandate objectives, the fomc in its january statement indicated it can afford to be patient as we assess the need for further adjustments in our policy stance. 2 going forward, we need, i believe, to be cognizant of the balance we must strike 1 / 2 bis central bankers'speeches between ( 1 ) being forward looking and ( 2 ) maximizing the odds of being right given the reality that the models that we consult are not infallible. for example, were a model to predict a surge in inflation, a decision for preemptive hikes before the surge is evident in actual data would need to be balanced against the considerable cost of the model being wrong. given muted inflation and stable inflation expectations, i believe we can be patient and allow the data to flow in as we determine what future adjustments to the target range for the federal funds rate may be appropriate to strike this balance. we also decided at our january meeting to maintain our current operating regime a " floor " system - - for implementing monetary policy. 3 the fomc will continue to set the stance of policy by establishing the target range for the federal funds rate. the interest on excess reserves rate will be our primary tool to keep the federal funds rate in the target range. in this regime, we will provide an ample supply of reserves in the banking system to ensure that we remain on the flat portion of the reserve demand curve and that the federal funds rate is insulated from shocks to reserve demand and supply. with this decision on our operating regime made, the committee can now decide on the appropriate