Inflation battle still on, says RBI

The Reserve Bank of India is keeping its pressure up on inflation. HT reports.

The Reserve Bank of India is keeping its pressure up on inflation.

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"While the growth outlook for 2010-11 remains robust, inflation has emerged as a major concern," the central bank said in its annual report released on Tuesday, signalling that its year-long battle on the priceline hovering around double-digit levels is far from over.

"Inflation pressures are coming up sharply while the global economy has moved from a state of some comfort to a state of less comfort," said Subir Gokarn, RBI deputy governor.

However, RBI sees the country's GDP growingat 8.5 per cent in the year 2010-11 as the economy comes out of a slowdown as a result of the global financial crisis.

India had avoided a financial crisis at home and the risk of a potential output shock is remote, the report observed.

"With fiscal consolidation, favourable demography and further structural reforms, the potential growth could be raised to double digit level," added the report.