Govt to take steps to help RBI relook at monetary policy

"We still believe food inflation is a cause of major concern and it needs to be tackled in a manner that we are able to give comfort to the regulator Reserve Bank that it is time for them to have a relook at the monetary policy," department of economic affairs secretary Arvind Mayaram said at an event organised by Ficci.

"We believe that we are positioning ourself in that direction (fiscal correction). I cannot say about Reserve Bank of India but this is my feeling that they will also be more amenable to look at the growth requirements once they see that there is serious move by the government in that direction," he said.

The central bank, in its mid-quarterly review of monetary policy to be announced on September 17, is expected to take steps to promote growth and also contain inflationary expectations.

Talking about rainfall deficit, Mayaram said it is not going to be as low as it was expected at the beginning of the monsoon season. "But the good news also is that we have about 80 million tonne of reserves and therefore food prices will be tempered because of intervention that the government will wish to make," he said.

The government is committed to use any buffer stocks to temper any increases in prices beyond tolerable levels, he added.