May 3 (Reuters) - Following are statements from Indian policymakers as well as the latest news and scheduled events.
* Denotes new entry.
* India's central bank raised interest rates by a sharper-than-expected 50 basis points and signalled it would battle stubbornly high inflation even at the expense of the government's economic growth ambitions.
'We need to bring down inflation in order to sustain medium-term growth even if that means sacrificing some growth in the short term,' Reserve Bank of India (RBI) Governor Duvvuri Subbarao said.
* India's central bank will ensure that the liquidity situation does not counteract its anti-inflationary stance, a deputy governor of the Reserve Bank of India, Subir Gokarn, said following the annual monetary policy meeting.
'As long as we are in our anti-inflationary stance, which is what we have signalled we will be in till further notice, we would prefer liquidity to be in deficit because transmission is relatively more efficient when system is in deficit.'
* India's finance minister Pranab Mukherjee said the central bank's rate action was needed to contain inflation and that he was not confident if energy prices would be manageable.
Mukherjee said that he had agreed beforehand with Reserve Bank of India (RBI) Governor Duvvuri Subbarao on the quantum of the interest rate hike.
'Inflationary pressure in the economy is still very high,' he said. 'So far as the energy prices are concerned, I am not confident where it would be, at what level it would be, whether it will be at manageable levels or not. Therefore, that uncertainty is there.'
* India's headline inflation is expected to ease to 8.3 percent in April, from nearly 9 percent in the previous month, the finance ministry's chief economic adviser said.
Kaushik Basu also said on Tuesday the government may be compelled to cut economic growth forecast for the current fiscal year, if oil prices don't come down.
'My belief is that April inflation will be 8.3 percent. After that it will be a difficult, slow, downward movement in inflation,' Basu said.
'The most critical variable which could compel us to change (the economic growth forecast) is if oil prices remain where it is for several more months.'
* India's economy is unlikely to grow 9 percent in the current financial year that started last month, the deputy chairman of India's Planning Commission said on Tuesday.
'The 9 percent growth, that was originally projected (for the current fiscal), may not be possible. I hope that we will do better than 8 percent,' Montek Singh Ahluwalia said.
'We have not produced any planning commission's estimates, but lowering the growth rate from 9 percent is quite sensible.'
CONTEXT NEWS
* The central bank raised its policy rate to 7.25 percent, the ninth hike since March 2010, to counter inflation that is just shy of 9 percent.
The RBI's policy has been the most aggressive amongst peers in Asia, but has had little effect on inflation that remains persistently above the bank's comfort level of around 5 percent and that has shot past its projections.
* Brent crude dipped below $124 a barrel, below its 2011 high of $127.02, as the dollar rebounded from a three-year low on Tuesday.
India's central bank said high prices of oil and other commodities and the cumulative impact of its policy measures will lead to growth of about 8 percent in the current fiscal year, assuming a normal summer monsoon and global crude oil prices of $110 a barrel.
* In February, the government had forecast India's annual economic growth in the range of 8.75 percent to 9.25 percent for this fiscal year. However, private economists have been increasingly cutting their growth forecasts for India, citing high inflation and rising interest rates.
SCHEDULED EVENTS THIS WEEK:
THURSDAY, May 5
Weekly food inflation data at around 12 p.m. (0630 GMT).
FRIDAY, May 6
Forex reserves, M3 money supply, Bank credit at 5 p.m. (1130 GMT).
(Compiled by C.J. Kuncheria and Rajesh Kumar Singh in NEW DELHI; editing by Malini Menon) Keywords: INDIA POLICY/SNAPSHOT (kuncheria.jacob@thomsonreuters.com)(+91 11 4178 1007)(Reuters Messaging: kuncheria.jacob.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
* Denotes new entry.
* India's central bank raised interest rates by a sharper-than-expected 50 basis points and signalled it would battle stubbornly high inflation even at the expense of the government's economic growth ambitions.
'We need to bring down inflation in order to sustain medium-term growth even if that means sacrificing some growth in the short term,' Reserve Bank of India (RBI) Governor Duvvuri Subbarao said.
* India's central bank will ensure that the liquidity situation does not counteract its anti-inflationary stance, a deputy governor of the Reserve Bank of India, Subir Gokarn, said following the annual monetary policy meeting.
'As long as we are in our anti-inflationary stance, which is what we have signalled we will be in till further notice, we would prefer liquidity to be in deficit because transmission is relatively more efficient when system is in deficit.'
* India's finance minister Pranab Mukherjee said the central bank's rate action was needed to contain inflation and that he was not confident if energy prices would be manageable.
Mukherjee said that he had agreed beforehand with Reserve Bank of India (RBI) Governor Duvvuri Subbarao on the quantum of the interest rate hike.
'Inflationary pressure in the economy is still very high,' he said. 'So far as the energy prices are concerned, I am not confident where it would be, at what level it would be, whether it will be at manageable levels or not. Therefore, that uncertainty is there.'
* India's headline inflation is expected to ease to 8.3 percent in April, from nearly 9 percent in the previous month, the finance ministry's chief economic adviser said.
Kaushik Basu also said on Tuesday the government may be compelled to cut economic growth forecast for the current fiscal year, if oil prices don't come down.
'My belief is that April inflation will be 8.3 percent. After that it will be a difficult, slow, downward movement in inflation,' Basu said.
'The most critical variable which could compel us to change (the economic growth forecast) is if oil prices remain where it is for several more months.'
* India's economy is unlikely to grow 9 percent in the current financial year that started last month, the deputy chairman of India's Planning Commission said on Tuesday.
'The 9 percent growth, that was originally projected (for the current fiscal), may not be possible. I hope that we will do better than 8 percent,' Montek Singh Ahluwalia said.
'We have not produced any planning commission's estimates, but lowering the growth rate from 9 percent is quite sensible.'
CONTEXT NEWS
* The central bank raised its policy rate to 7.25 percent, the ninth hike since March 2010, to counter inflation that is just shy of 9 percent.
The RBI's policy has been the most aggressive amongst peers in Asia, but has had little effect on inflation that remains persistently above the bank's comfort level of around 5 percent and that has shot past its projections.
* Brent crude dipped below $124 a barrel, below its 2011 high of $127.02, as the dollar rebounded from a three-year low on Tuesday.
India's central bank said high prices of oil and other commodities and the cumulative impact of its policy measures will lead to growth of about 8 percent in the current fiscal year, assuming a normal summer monsoon and global crude oil prices of $110 a barrel.
* In February, the government had forecast India's annual economic growth in the range of 8.75 percent to 9.25 percent for this fiscal year. However, private economists have been increasingly cutting their growth forecasts for India, citing high inflation and rising interest rates.
SCHEDULED EVENTS THIS WEEK:
THURSDAY, May 5
Weekly food inflation data at around 12 p.m. (0630 GMT).
FRIDAY, May 6
Forex reserves, M3 money supply, Bank credit at 5 p.m. (1130 GMT).
(Compiled by C.J. Kuncheria and Rajesh Kumar Singh in NEW DELHI; editing by Malini Menon) Keywords: INDIA POLICY/SNAPSHOT (kuncheria.jacob@thomsonreuters.com)(+91 11 4178 1007)(Reuters Messaging: kuncheria.jacob.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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