Ahead of the annual credit policy review, RBI governor D Subbarao today met Prime Minister Manmohan Singh and finance minister Pranab Mukherjee and is believed to have discussed the macro-economic situation and steps to arrest the decline in growth.
RBI is scheduled to announce the annual review of its monetary policy on April 17.
It is a standard practice for RBI governor to discuss the state of economy with the finance minister before review of the monetary policy.
Industry, affected by the high interest rate regime, is eagerly awaiting the policy.
India Inc wants RBI to cut interest rate to help push economic activity which has slowed down, more so as inflation has started moderating. Inflation, which remained high during 2010 and most of 2011, slowed to 6.95% in February.
The central bank has adopted the tight money policy since March 2010 to tame high inflation by hiking interest rate 13 times. However, it has not hiked the key rate (repo) in its past three policy reviews and has even hinted at reversal of the policy rate cycle.
India's economic growth in 2011-12 has been estimated at 6.9%, as against 8.4% in the previous year. However, the government expects the economy to clock 7.6 per cent GDP growth in the current fiscal.
During the April-February period of 2011-12, the growth in Index of Industrial Production (IIP) has slowed to 3.5%, as against 8.1% year-on-year.