Briefing reporters, he termed Reserve Bank of India’s move as a good one and in tandem with the fiscal policy and thinking of the government. “It will have a salutary impact on the inflationary pressure,” he added.

Planning Commission Deputy Chairman Montek Singh Ahluwalia said RBI had taken the “right” stepas inflation was above comfort level.

On RBI’s forecast of inflation hovering at 8 per cent as against earlier projection of 7 per cent by March end this year, Ahluwalia said “though there was expectation that inflation would come down to 7 per cent one has to keep in mind that inflation rate in February is higher than what one wanted it to be”.

On whether tight monetary policy would impact growth he said in the long run overall growth momentum would not be hurt. Commerce & Industry Minister Anand Sharma hoped that that credit would  continue to be made available “freely, liberally and on good terms to the industry”.

He said “industry must be encouraged to step up investments for capacity building and for additional capacity creation. This is vital for boosting growth.”