we have recently seen a significant strengthening of the euro against the dollar, and to a lesser extent against sterling, which will help to ease some of the earlier tensions. sterling ’ s exchange rate has recently moved to two year high against the dollar and nearly a three year low against the euro. sterling has consequently also weakened in overall, effective, terms, from some 107 some months ago to currently around 103 - which is still within the earlier range. it is frankly anyone ’ s guess whether the recent pattern of exchange rate movements will be extended, but what has happened so far, taken together with the improved prospect for global demand, suggests that the adverse external factors weighing down the uk economy over the past two years or so should now diminish. that offers the prospect of both stronger and more balanced demand and overall output growth. indeed we are already seeing - in surveys but also now in actual data for the past month or so - increasing signs of a recovery in overall output growth, including a recovery in the manufacturing sector which was the most hard hit by the global environment last year. but our policy dilemma has not simply gone away. in fact trying to weigh up the prospects for the various different components of demand in order to decide what we need to do with interest rates to keep overall, aggregate, demand growing broadly in line with the underlying, supply - side, capacity of the economy to meet that demand, is a perpetual dilemma. in the present context what that means is that, in order to accommodate the expected improvement in external demand, we are likely to need a moderation in the recent strength of domestic demand growth - particularly the consumer spending growth which has sustained the overall economy through the period of global weakness - if we are to avoid a build - up of inflationary pressure further ahead. the necessary moderation of consumer demand growth could come about of its own accord, if, for example, consumers become more reluctant to take on additional debt. it is perhaps not surprising that as they have become more acclimatised to a low inflation / low nominal interest rate environment, households have been prepared to incur more debt relative to incomes, and the debt to income ratio has indeed risen to an all - time high over recent years. but that adjustment cannot go on indefinitely and will at some point come to an end. in the meantime many commentators have recently focussed on accelerating house price inflation which is closely related to the build - up of debt - as worrying evidence of a bubble that will eventually burst

deepak mohanty : economic and financial developments in uttarakhand speech by mr deepak mohanty, executive director of the reserve bank of india, at the g. b. pant university of agricultural technology, pantnagar, 31 august 2012. * * * the assistance provided by p k nayak and s suraj in preparation of the speech is acknowledged. i thank professor murthy for inviting me to share my thoughts with a young audience in an institution which has a formidable reputation in agricultural research as having pioneered the “ green revolution ”. in my talk today, i propose to briefly outline the economic and financial structure of the state as well as highlight various financial inclusion initiatives taken by the reserve bank. i will then indicate a few policy challenges in sustaining the growth momentum. i conclude with some thoughts on the agricultural economy. i will trace the economic development starting from the early 2000s mainly because uttarakhand was instituted in 2000 as the 27th state of the republic of india. the state known as the abode of gods is truly a paradise for nature lovers and adventure sports endowed with the natural bounty of glaciers, rivers and forests. it is one of the thinly populated states accounting for 1. 6 per cent of the total geographical area of the country and 0. 8 per cent of the national population. located in the foothills of the himalayas, uttarakhand ’ s terrain and agro - climatic conditions obviously provide unique challenges as well as opportunities for growth and development. macroeconomic trends in the 2000s, the indian economy witnessed acceleration in economic growth. it is noteworthy that the state registered even higher growth thus emerging as one of the fastest growing states in india ( chart 1 ). the growth acceleration in the state was also reflected in the per capita income which increased by 168 per cent from ₹19, 457 in 2001 – 02 to ₹52, 125 by 2011 – 12. the increase in the state per capita income was much sharper as compared to the all - india per capita income which increased by 81 per cent from ₹20, 943 to ₹37, 851 during the same period ( chart 2 ). this enabled the state to significantly improve its rank among the 28 states from 17th to 10th during the same period. the growth impulses in the initial phase during 2001 – 08 emanated mainly from industry and services. in the latter phase of 2009 – 12, growth was driven by the services sector. however, in both the phases agricultural growth remained low and volatile (