Conduit used as ground

I had a rather strange discussion with our electrical inspector today. We were planning on using the conduit as our grounding conductor. I would rather pull ground wire but we are trying to eliminate extra cost. He told me that we can use the conduit as a ground but where it enters any concentric knockout that has a bigger size available we could not use it as a ground. we would need to install a bonding bushing or install a ground wire. i knew this rule applied for service conduits but i was not awear it applied for branch circuits of 110v. Any input would be greatly appreciated.

Typically it is good practice to install a ground wire but do you see any code violation here we are on the 2011 nec

Thanks