A couple of days ahead of the monetary policy review of the RBI, finance minister Pranab Mukherjee on Saturday expressed confidence that the central bank would adjust the
monetary policy to address the challenges before the economy.
"I am confident they (RBI) will adjust the monetary policy as we are adjusting the fiscal policy," said Mukherjee at an Assocham conference.
RBI is likely to cut rates in its review of monetary policy on Monday, in the face of economic growth slipping to a nine-year low of 6.5 % during 2011-12.
"We need to take necessary steps by removing supply constraints," Mukherjee said. "Inflation arising out of agriculture products need not necessarily be controlled through money supply or tightening monetary policy."
Mukherjee said the government was taking steps to address concerns expressed by global rating agencies such as Standard & Poor's as well as the industry. "As finance minister, I cannot ignore the ground realities. I do not dismiss their concerns, I take serious note of their concern and try to find out what is to be done," he said.
Mukherjee listed the growing burden of petroleum subsidy as one of the main areas of concern, for which he appealed to states to reduce their taxes.
On the Eurozone crisis, Mukherjee said that India is as concerned as others considering that the developments have also hit the value of the rupee.