Finance Minister K.M. Mani has urged the new Governor of the Reserve Bank of India (RBI) Reghuram Rajan to review the tight monetary policy the bank had been following since April 2011.

In a letter sent to the RBI governor on Thursday, Mr. Mani said the escalation of prices of all essential commodities being experienced in the country now was due to supply side factors and increasing cost of production. The remedy, it seemed, should come from initiatives to encourage the productive sectors. Among other things, the productive sectors required selective credit measures, he said.

Mr. Mani said the country’s burgeoning current account deficit was a matter of grave concern. Gold imports contributed in a big way to the problem.