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Journalism of Courage
Terming the 8.6 per cent inflation as very high,the Reserve Bank of India today hinted that it could take more policy actions in its review meeting next month.
8.6 per cent (headline inflation) is very high which needs to be brought down. We would study it and the matter would be reviewed on June 17 next, RBI Governor D Subbarao told reporters here after a board meeting which reviewed monetary and financial developments in the country.
In its annual credit policy meeting earlier this month,Subbarao had made it clear that containing inflation would take precedence over growth,which is pegged at 8 per cent for 2011-12. Although RBI has already hiked the key policy rates nine times since March 2010,inflation has continued to remain at about 9 per cent,which is much higher than the RBIs comfort zone of 5-6 per cent.
Inflation came down marginally to 8.66 per cent in April from 9.04 per cent in March.
Referring to the governments fiscal deficit target of 4.6 per cent for 2011-12,Subbarao said it would be difficult to achieve in view of the impact of rising crude oil and fertiliser prices in the international market. It would be very difficult to attain the fiscal deficit target unless there is adjustment on expenditure or tax.. It depends on what decision they take and a number of issues,most importantly on the adjustment of fuel prices, he said.
