Extension of tight monetary control unlikely: Pranab

Union Finance Minister Pranab Mukherjee said here on Sunday that the Centre was optimistic that there would be no extension as far as tightening of monetary policy was concerned, as it will impact growth.

“As far as tightening monetary policy is concerned, if this policy needs to be extended, it will have some impact on the overall growth scenario. But I am optimistic that it will not have to be extended,” Mr. Mukherjee said at an event in the city.

Mr. Mukherjee also said that with a good monsoon, inflation was likely to come down to single-digit figures.

“It is true that food price inflation has again reached a double-digit figure of above 10 per cent in the last week compared to more than 8 per cent in the previous week. I believe that it will again come down to single digits and by the end it may be possible to have inflation around 6-7 per cent,” he said.

When asked about the continuous rise in interest rates, he said that at present it was not possible to ease the tightening.

Commenting on the gross domestic product (GDP) figures for the first quarter of this financial year that have recently been released, Mr. Mukherjee said that he was “disappointed” that figures had slid to 7.7 percent this year as compared to the 8.8 percent for the same period last year, but it was “not totally unexpected.”