Mumbai, January 28: Hinting at some tightening of the monetary policy tomorrow, the Reserve Bank today said inflation is a major challenge and would address it without hurting the growth.
“Returning to high growth path while avoiding the situation of generalised increase in inflation through monetary policy action has emerged as a delicate challenge for the RBI,” the apex bank said in its macroeconomic developments issued on the eve of the third quarterly review of the monetary policy.
Noting that inflation of food items soared to 21.9 per cent, the RBI said, “in December 2009, there have been signs of emergence of generalised inflation.”
Moreover, it added, the high inflation arising from rising food prices could spill over to non-food items and further add to inflationary pressures.
The WPI-based inflation, which rose from sub-zero level last year to 7.
–Agencies