"Returning to high growth path while avoiding the situation of generalised increase in inflation through monetary policy action has emerged as a delicate challenge for the RBI," the apex bank said in its macroeconomic developments issued on the eve of the third quarterly review of the monetary policy.
Noting that inflation of food items soared to 21.9 per cent, the RBI said, "In December 2009, there have been signs of emergence of generalised inflation."
Moreover, it added, the high inflation arising from rising food prices could spill over to non-food items and further add to inflationary pressures.
The WPI-based inflation, which rose from sub-zero level last year to 7.3 per cent in December, is expected to cross 9 per cent by the end of March, as indicated by the Chief Statistician of India Pronab Sen.
On the positive side, the RBI-sponsored survey revised the GDP growth forecast for the fiscal to 6.9 per cent from 6 per cent earlier. The instruments, which RBI usually utilises to contain money supply, include Cash Reserver Ratio, Statutory Liquidity Ratio, repo and reverse repo rates.
Ficci survey pegs GDP growth at 6.9%
Reserve Bank circular on NPA provisioning soon
Timing stimulus exit is a challenge: RBI
At 11.44%, Bihar is India's fastest growing state
Countries with highest per capita GDP