Finance Minister Palaniappan Chidambaram while delivering a speech in the Norwegian School of Management on Wednesday, 24 October 2007 observed that India's healthy economic growth has brought forth the challenge of abundant international capital flows and their impact on the domestic economy, particularly on prices and the exchange rate.
In the speech titled 'Road travelled and the way forward,' Chidambaram explained that on the demand side higher growth in foreign reserves, which were estimated at over $239 billion at the end of September 2007, and robust credit growth have exerted pressure on prices.
The minister further observed that from time to time, our economy is faced with a mismatch between supply and demand in the case of primary commodities, including food articles.
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