New Delhi: Finance Minister Pranab Mukherjee on Friday said the tight monetary policy of the Reserve Bank which has helped in curbing inflation has also impacted growth.
"While the increase in repo rate along with other monetary measures has impacted the inflationary pressures favourably, there are visible sign of moderation in the growth of different sectors of the economy," Mukherjee said in a reply to the Lok Sabha.
The Reserve Bank has hiked policy rates 13 times since March, 2010 to contain the near double-digit inflation. Inflation for October stood at 9.73 per cent.
India's GDP growth rate has been projected at 8.5 per cent in 2010-11, but there are apprehensions that it may slip below 8 per cent due to the global economic turmoil, coupled with high inflation and interest rates in the country.
Mukherjee said the impact of such rate hikes is visible on the interest rate sensitive sectors, such as real estate, consumer durables and automobile, where demand is slowing.
He said the government is monitoring the price situation regularly and is working on ensuring price stability. Food inflation, which account of 15 per cent in the overall inflation, stood at 9.61 per cent for the week ended November 12.
He said the government has taken several steps to contain prices of essential commodities by reducing import duty on wheat, onion and pulses to zero.
Besides, a ban on the export of edible oil and pulses and futures trading in rice, urad and tur was among the measures taken by the government to moderate essential commodity prices.
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