“The monetary policy has been gradually tightened... Monetary measures may end up moderating growth if they continue for an extended period of time,” said Mukherjee at an industry meet.However, he added that in the short-term, moderating aggregate demand was critical to check inflation, which is “our major challenge”.The Reserve Bank of India had yesterday hiked key policy rates for the tenth time since March 2010 to tame inflation, which crossed the 9-per-cent mark in May.Inflationary pressures are generated from higher global commodity prices and domestic demand-supply imbalances in several commodities.Mukherjee said while inflation affected the growth momentum, the drivers of economic expansion were still intact.“The growth drivers of the economy remain broadly intact,” he said, adding, “I am so far hopeful that we should be able to repeat the growth performance of 2010-11 in 2011-12 as well,” he said.In 2010-11, the country’s GDP is estimated to have grown at the rate of 8.5 per cent.Meanwhile, the Reserve Bank today said it had no magic wand to bring down the rate of price rise.“You all want that inflation should come down. Neither the ministry of finance nor the Reserve Bank has any magic wand to bring down inflation,” RBI deputy governor K.C. Chakrabarty said at an Assocham meet here.
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