Finance Minister P Chidambaram on Wednesday asserted that fuel price hike will have only a "moderate" impact on inflation and he did not see any pressure on interest rates.
"Our economic fundamentals are strong -- foreign exchange reserves buoyant, export rising, balance of payment position robust, rupee strong and inflation is moderate. Government revenue till August was according to the budget projection," Chidambaram said.
The government wants to sustain a high growth through greater emphasis on agriculture, maintaining buoyancy in industrial production and sustaining the high growth in services sector, he said inaugurating while workshop on accounting systems.
Inflation, interest rates to rise
According to Reserve Bank of India projection, the economy is slated to grow by 7 per cent this fiscal on the back of 6.9 per cent estimated for 2004-05.
On the hike in petrol and diesel prices in September first week, Chidambaram said "it will have a moderate impact."
Though WPI-based inflation came down mainly due to "base year effect" as prices were higher last year, Chidambaram said this effect was being witnessed since November.
Indicating that there was no pressure on interest rate, he said, "No banker has told me that there is problem on the liquidity situation."
He said there was no pressure on government finances. "As of now, we don't need to borrow more. In the first half, we have stuck to the budget target."