The Reserve Bank of India's primary goal is to bring inflation closer to its objective, but it can't ignore concerns about growth, according to governor Shaktikanta Das, who spoke to the Economic Times on Friday.
"We are committed to keeping inflation under control. At the same time, we must consider the demands of expansion. There can't be a circumstance where the operation goes well but the patient dies "Das said.
"We'll have to bring prices down, and we can't afford such a large growth shock that would have a negative impact on inflation. It must be a balanced decision, with inflation management taking precedence "He went on to say.
Inflation based on the consumer price index increased more than predicted to 7.79 percent in April, an eight-year high, and remained beyond the Reserve Bank of India's 2 percent -6 percent tolerance limit for the fourth month in a row.
"Our primary aim at the present," said the RBI chairman, "is to bring inflation closer to the target," which is set at 4% in the medium run.
According to Das, the next policy move would be determined by the inflation prediction given by the monetary policy committee (MPC) at its June meeting, which is based on recent occurrences and how they affect the outlook.
Following a 40-basis-point rate hike by the MPC earlier in May, India announced a series of modifications to the tax structure charged on key commodities on Saturday in an effort to protect consumers from rising prices.
All of the government's inflation-control initiatives, as well as recent geopolitical happenings, would be reflected into the inflation estimates, according to Das.
According to a Reuters poll, India's economic recovery from the Covid-19 outbreak slowed to 4% in the January-March quarter.