<p>"As a standard practice I had come to review the macro economic situation with Finance Minister and senior officers ahead of the policy review ," Subbarao told reporters after meeting Mukherjee.<br /><br />The Reserve Bank is scheduled to announce the annual credit policy on May 3 in Mumbai during which it is widely believed that the central bank might increase short term lending (repo) and borrowing (reverse repo) rates by around 25 basis points.<br /><br />The RBI has increased these rates eight times since March 2010 to tame price rise.<br />The central bank faces a challenging task of managing the inflationary pressure at a time when the industrial growth has started showing signs of lagging.<br /><br />On whether he anticipated high inflation to impact economic growth, Subbarao said, "We will answer these questions on May 3."<br /><br />The headline inflation for March at 9 per cent breached RBI's projection of 8 per cent. This is much higher than the comfort zone of 5-6 per cent.<br /><br />The government expects India's GDP to expand by 9 per cent in the current fiscal.<br />Factory output, as measured by the Index of Industrial Production (IIP) slowed to 3.6 per cent in February, 2011, compared to 15.1 per cent expansion in the year-ago period.</p>
<p>"As a standard practice I had come to review the macro economic situation with Finance Minister and senior officers ahead of the policy review ," Subbarao told reporters after meeting Mukherjee.<br /><br />The Reserve Bank is scheduled to announce the annual credit policy on May 3 in Mumbai during which it is widely believed that the central bank might increase short term lending (repo) and borrowing (reverse repo) rates by around 25 basis points.<br /><br />The RBI has increased these rates eight times since March 2010 to tame price rise.<br />The central bank faces a challenging task of managing the inflationary pressure at a time when the industrial growth has started showing signs of lagging.<br /><br />On whether he anticipated high inflation to impact economic growth, Subbarao said, "We will answer these questions on May 3."<br /><br />The headline inflation for March at 9 per cent breached RBI's projection of 8 per cent. This is much higher than the comfort zone of 5-6 per cent.<br /><br />The government expects India's GDP to expand by 9 per cent in the current fiscal.<br />Factory output, as measured by the Index of Industrial Production (IIP) slowed to 3.6 per cent in February, 2011, compared to 15.1 per cent expansion in the year-ago period.</p>