Union Finance Minister Pranab Mukherjee said on Tuesday that the
country's economy is responding well.
Addressing the media here, Mukherjee said: "The economy, I would
like to say is responding well, the policy statement which we have
initiated, the Reserve Bank of India (RBI) and Finance Ministry are
working in close co-operation and this will continue for future."
He noted that the economy was likely to expand in the range of 6.5
to 6.75 percent during the fiscal year ending March 2010.
Mukherjee further elaborated that the easy monetary policy is likely
to continue until economic recovery is firm after the RBI started
the first phase of its exit from easy policy but held rates steady.
Earlier in the day, the RBI laid the groundwork for a rise in
interest rates by tightening credit to the commercial property
sector, lifting its inflation forecast and warning of the threat of
asset price bubbles.
The RBI left key interest rates on hold but surprised markets by
removing emergency liquidity support measures that were implemented
to protect Asia's third-largest economy from the global downturn.
Mukherjee also informed that the government took essential measures
to tackle the adverse impact of inflationary pressure.
"In respect of the inflationary pressure I can tell you that we have
taken major steps to ensure that the adverse impact of inflationary
pressure is reduced by strengthening the supply management," he said
"Commodities of short supply are imported though there is likely to
be shortfall of Kharif crops but the existing stock is sufficient.
There would be no shortage of food grains," Mukherjee added.