rules to deal with anti - competitive practices. better transportation and warehousing facilities could also lower costs and reduce waste of perishable products. multi - brand retail has been seen as a possible means to improve the supply chain that will be beneficial to both producers and consumers. given the current debate on the subject in india and varied international experience, multi - brand retail has to be seen as a potential instrument whose effectiveness, however, could be known only over time. besides food, fuel has been another major source of price pressure, which is directly linked to international trends in crude petroleum prices. indian basket crude price had scaled to as high as usd 132. 5 per barrel in july 2008, i. e. just before the global crisis. the impact of the bis central bankers ’ speeches global crisis in the advanced economies was so strong, that it dragged international oil prices down sharply, and the indian basket crude price fell to as low as usd 43. 2 per barrel in february 2009. since then, notwithstanding the persistence of weak growth momentum in advanced economies, oil prices have bounced back to high level. in april 2011 indian basket crude price reached usd 118. 6 per barrel, before softening thereafter somewhat, but still remaining range bound at high level between usd 110 to 105 per barrel. in india, changes in international crude prices are not fully passed through to domestic prices of petroleum products, because of the administered pricing mechanism. while petrol prices have been deregulated since june 2010, prices of diesel, lpg and pds kerosene are still regulated to insulate consumers against high global crude oil prices, which, however, inflate the subsidy bill with every increase in oil prices. while in the short - run the impact on inflation gets suppressed through administered pricing, the subsidy induced pressure on the fiscal position becomes a risk to the inflation situation in the medium run. moreover, subsidised pricing does not encourage the desired level of energy conservation, which is critical given our high level of dependence on oil imports. according to the draft of the approach to the 12th five year plan ( 2012 – 13 to 2016 – 17 ), india ’ s import dependence on oil is expected to increase from 76 percent in 2010 – 11 to 80 percent by the end of the plan. during the same period, import dependence in natural gas is projected to increase from 19 percent to 28. 4 percent and in the case of coal the increase will be from 19. 8 percent to 22. 1 percent. current

check capital inflows? an important lesson from 2006 onwards is that nothing should be off the table. when we went in for market stabilisation bonds, it was on the basis of the recognition that conventional instruments were not adequate. in september – october 2004 and since december 2006, we reverted to the use of crr ( cash reserve ratio ) as an instrument of liquidity management. earlier, the position was that we would try and wean ourselves away from the use of that instrument and focus only on policy rates. but, we are now using it ( crr ) actively. the same criterion applies to any measure that might relate to capital inflows, whether quantity restrictions or price restrictions. there is, currently, no proposal to use either of these but if the situation warrants, we will not deny ourselves the opportunity of using them. what is your estimate of the current account deficit for 2010 – 11? we have not put out a formal assessment but we do not see any threat. in any event, we do expect that capital inflows will be more than adequate to cover the current account deficit. we have to decide on how we are going to manage the balance of payment surplus. there is no intervention in the exchange rate market with an exchange rate target in mind. look at the exchange rate movement during the last couple of years – from a bottom of around rs 52 ( a dollar ) to a top of rs 39. such a wide variation does not suggest management of the exchange rate. volatility may be managed but the levels over this period of time have not. at the same time, we cannot ignore the fact that massive swings in the exchange rate are disruptive, as many stakeholders do not have the capacity to mitigate foreign exchange risk. developments like foreign exchange futures obviously help and we are moving further down that road. rbi has projected 7. 5 per cent gdp growth and then talked about unbalanced growth. how do you reconcile the two? if you focus on the aggregate, the number looks reasonable. but, when you look at the disaggregated picture, it is still an unbalanced recovery. there is still a relatively high dependence on government spending. what this tells you is that the private sector is yet to provide full comfort in terms of its participation in the recovery process. so, that is a risk. similarly, some sectors such as consumer durables and automobiles are doing very well, while others are sluggish. again